This article shows how meeting frictions affect equilibrium trading mechanisms and allocations in an environment where identical sellers post mechanisms to compete for buyers with ex ante heterogeneous private valuations. Multiple submarkets can emerge, each consisting of all sellers posting a particular mechanism and the buyers who visit those sellers. Under mild conditions, high-valuation buyers are all located in the same submarket, and low valuation buyers can be in: (i) the same submarket, (ii) a different submarket, and (iii) a mixture of (i) and (ii). The decentralized equilibrium is efficient when sellers can post auctions with reserve prices or entry fees.

We build a multi-sector spatial general equilibrium model that features heterogeneous firms' and workers' location choices to account for China's export surge between 1990 and 2005 using three policy changes: China's import tariffs, tariffs imposed against China's exports, and barriers to internal migration in China. We find that tariff and migration policies jointly accounted for 30% of China's export growth. We also find evidence that suggests a positive interaction effect of tariff and migration policies. As migration reform prepared the country to become more export oriented, China enjoyed faster export growth after opening to trade than it would have otherwise.

Peer-to-peer (P2P) sharing marketplaces enable sharing of idle resources. When a renter requests an owner’s resource, the owner needs to decide whether to accept the request: accepting it helps the owner fill up the idle periods of the resource and generate a payoff but reduces the flexibility to serve a future request for a longer duration. This paper develops a framework to uncover the tradeoffs faced by owners on these platforms when making acceptance decisions, which can be used by owners to optimize their decisions and by platforms to improve their operations. The model explicitly accommodates two types of owners: some are attentive to the availability states of their cars and forward-looking, whereas others myopically make the acceptance decisions. Applying the model to unique data from a leading peer-to-peer car sharing platform in China, we obtain similar sizes of both types of owners and find that female, experienced, and younger owners are more likely to be strategic. The results also reveal the dif

We examine the stock market returns in an environment in which the dates of the central bank’s information supply through public announcements are not prescheduled. We document that positive excess returns are accumulated as early as 3 days before China’s central bank releases the monthly data of monetary aggregates, which may be announced either early or late in a month. In particular, this pre-announcement premium exists only when an announcement arrives late in an announcement cycle. We provide a theoretical framework in which the degree of information acquisition in the market increases as the date approaches the end of an announcement cycle while investors are still waiting for the arrival of an announcement, a hypothesis that receives strong empirical support. We show that the information acquisition channel highlighted in Ai, Bansal, and Han (2022) explains the uncertainty reduction and the positive risk premium before monetary announcements in China.

Chinese local leaders are frequently moved across prefectures. By combining local leader rotation data and comprehensive firm land parcel purchase data across prefectures from 2006 to 2016, this paper examines how firm-politician connections affect resource allocation and finds that a firm headquartered in a leader's previous work prefecture purchases three times more land parcels in that leader's new governing prefecture than the prefecture-year mean, at half the unit prices. Identification is from within-firm-year variation in various prefectures through exogenous politician rotation. Land usage efficiency is lower for these follower firms' land parcels. Land allocation distortion is also economically sizable.

Researchers often utilize time-based models of queue abandonment. In such models, researchers determine the length of time until abandonment by drawing from an exogenous distribution with no dependence on the system state. Recent empirical work, however, suggests that queue abandonment times may differ depending on key parameters of the system. We build on these empirical findings herein. Specifically, we study three operational drivers of abandonment – waiting time, queue length, and service rate – within the context of a hospital emergency department (ED) where patients often leave without being seen by a physician. We examine the shape of the hazard function for these patients and identify a dynamic Weibull distribution that is parameterized by queue length and service rate, effectively characterizes abandonment behavior in this context. We conduct a numerical study and demonstrate the benefit of using state-dependent abandonment times. Specifically, we show that a scaled arrival model that overlooks aband

This paper studies the causal impact of political connections on innovation. Using a unique hand-collected data set of sudden deaths of politically connected independent directors (i.e., retired government officials) in Chinese firms, we find that an unexpected loss of political connections increases a firm’s patent applications by 34% (14 patents). The innovation response is more pronounced in firms with stronger connections: when the connected directors held higher-level bureaucratic positions or when firms operate within their geographical jurisdictions. Upon losing political connections, firms face higher competitive pressure and divert resources from rent seeking into innovation investment. Our findings highlight the role of competition in the substitution between political connections and innovation, particularly in settings where formal institutions are weak.

Bitcoin derivatives positions are maintained with a self-selected margin, which is often too low to avoid automatic liquidation by the exchange, without notice, especially during periods of excessive volatility. Indeed, according to CryptoQuant, almost $80 billion of positions on centralised exchanges were liquidated during 2021, that is an average of over $200 million per day. So hedgers of bitcoin price risk should account for the possibility of automatic liquidation when taking positions on bitcoin futures. We derive a semi-closed form for an optimal hedging strategy with dual objectives – to minimize both the variance of the hedged portfolio and the probability of liquidation due to insufficient collateral. The solution depends on the statistical characteristics of the spot and futures extreme returns, and other parameters that characterize the hedger by choice of leverage, loss aversion and collateral management. An empirical analysis based on minute-level data compares the performance of the major direc

Scientists are expected to engage with the public, especially when society faces challenges like the COVID-19 pandemic or climate change, but what public engagement means to scientists is not clear. We use a triangulated, mixed-methods approach combining survey and focus group data to gain insight into how pre-tenure and tenured scientists personally conceptualize public engagement. Our findings indicate that scientists’ understanding of public engagement is similarly complex and diverse as the scholarly literature. While definitions and examples of one-way forms of engagement are the most salient for scientists, regardless of tenure status, scientists also believe public engagement with science includes two-way forms of engagement, such as citizen and community involvement in research. These findings suggest that clear definitions of public engagement are not necessarily required for its application but may be useful to guide scientists in their engagement efforts, so they align with what is expected of them

Bitcoin prices are driven by upward as well as downward jumps and so the bitcoin implied volatility surface behaves differently from those of established options markets. We analyze tick-level Deribit option price data, demonstrating increasing support for the limits-to-arbitrage hypothesis. Hence market makers are managing order imbalance and inventory more effectively as Deribit bitcoin options trading volumes increases. On the demand side, volatility traders drive both at-the-money and out-of-the-money option prices, the latter also being driven by directional traders. Directional effects were most pronounced during the price bubble of 2021. Further refinements of our tests assess time-to-maturity and time-of-day effects.