Knowledge that Transforms

We analyze consumer surplus when a monopolist can adjust both prices and product qualities across segments, engaging in secondand third-degree price discrimination simultaneously. We characterize the consumer-optimal segmentation and show that it has a striking structure: Consumers with the same value receive the same quality in every segment, though prices differ. Under mild conditions, any segmentation harms consumers if and only if demand is sufficiently more elastic than supply. Hence, potential benefits for consumers depend critically on demand and supply elasticities. These findings have implications for regulatory policy regarding price discrimination and market segmentation.

Digital platforms reduce geographic frictions, enabling better matching between service providers and users. I quantify reallocation gains in Swedish online health care, using nationwide time-conditional random assignment between patients and physicians. Matching high-risk patients with doctors effective at reducing Emergency Room visits lowers such visits by 4.4 percent (SE 1.3); reallocations also reduce Counter-Guideline antibiotics by 3.1 percent (1.4). I find limited trade-offs in matching; horizontal differentiation among doctors and varied patient needs allow improvement in multiple outcomes simultaneously. Efficiency-enhancing reallocations also affect equity. The findings highlight the potential for care reorganization aligning provider heterogeneity with patient needs when geographic constraints are lifted.

We study the effects of the largest corporate income tax cut in U.S. history on firms and workers. To identify causal effects, we use employer-employee matched tax records and event studies comparing similarly sized firms in the same industry that faced divergent tax changes due to their pre-existing legal status. Tax cuts cause increases in firms' investment, sales, profits, employment, and payrolls, with earnings gains concentrated among highly paid workers. In the short-run, 87% of private income gains flow to the top 10% of the income distribution.

Designing public transport networks involves trade-offs between coverage, service frequency, and direct service. We use the expansion of the bus system in Jakarta, Indonesia, to study these trade-offs. We analyze how new direct connections, changes in bus travel time, and wait-time reductions affect bus ridership and aggregate flows and estimate a transit network demand model by matching the route launch events. Commuters in Jakarta are 2–3 times more sensitive to wait time than bus time and inattentive to long routes. We develop a flexible framework to characterize optimal networks. A less concentrated network would increase ridership and commuter welfare.

Most organizations rely on managers to identify talented workers. However, managers who are evaluated on team performance have an incentive to hoard workers. This study provides the first empirical evidence of talent hoarding using personnel records and survey evidence from a large firm. Talent hoarding is self-reported by three-fourths of managers, is detectable in manager ratings of worker talent, and occurs more frequently under stronger hoarding incentives, proxied by performance-related pay, team size, and talent visibility. Using quasi-random exposure to talent hoarding, I show that hoarding deters internal job applications, inhibiting career progression and altering talent allocation in the firm.

Digitization reforms have been hailed as an effective way of strengthening state capacity. However, digitization can also fundamentally reshape the organization of bureaucracies. Using a unique administrative dataset on agricultural taxation and surveys of local bureaucrats from Punjab, Pakistan, we show that digitization reforms can have unintended consequences for state capacity. We exploit the staggered rollout of the digitization of land records in Punjab to show that digitization had a negative effect on tax collection. The fall in taxes was not due to a decrease in the tax base. Instead, digitization affected the bureaucrats’ capacity to collect taxes.

We study a canonical collective action game with incomplete information. Individuals attempt to coordinate to achieve a shared goal, while also facing a temptation to free-ride. More similar information can help them coordinate, but it can also exacerbate free-riding. Our main result shows that more similar information facilitates (impedes) achieving the common goal when it is sufficiently challenging (easy). We apply this insight to show why less powerful authoritarian governments may face larger protests if they restrict press freedom, when committee diversity is beneficial in costly voting, and when a more diverse community contributes more to public good provision.

How does information transmission change when it requires attracting the attention of receivers? This paper combines an experiment that varies freelance professionals’ incentives to attract attention about scientific findings, with several online experiments that exogenously expose receivers to the content created. Attention incentives lead to significantly less information being transmitted, but not more factually inaccurate content. These incentives increase information demand and the knowledge of interested receivers. However, among the majority of receivers who do not demand more information, attention incentives lower knowledge and increase biases in beliefs, revealing that missing information can be a channel through which misperceptions arise.

We examine how social interactions and friendships shape students' political opinions in a natural experiment at Sciences Po, a leading French university specializing in social and political sciences. The quasi-random assignment of students into short-term integration groups before their academic curriculum reduces political opinion gaps and fosters friendship formation. Using same-group membership as an instrumental variable for friendship, we find that friendship reduces opinion differences by 40% of a standard deviation in the opinion gap. Our evidence supports a homophily-enforced mechanism: friendships form among initially politically similar students, leading them to join political associations together, reinforcing their similarity. However, friendship does not significantly influence politically dissimilar pairs. Instead, it reduces opinion divergence without enforcing ideological convergence.

We consider an economy in which long-lived experts are matched with short-lived clients. Experts choose the type of client with whom they match, unobserved by the market. The interaction outcome depends on both the expert’s and the client’s type. We study the effects of supplying information about otherwise unobservable outcomes, such as “medical report cards,” to help clients identify better experts. Such information can lead to inefficient matches, as experts reject risky clients to build their reputation. Hence, information can reduce welfare. Withholding information can mitigate these perverse incentives at the cost of misallocating experts known to be inept.