Fiduciary duty aims to solve principal‐agent problems, and the United States is in the middle of a protracted debate surrounding the merits of extending it to all financial advisers. Leveraging a transaction‐level data set of deferred annuities and state‐level variation in common law fiduciary duty, we find that it raises risk‐adjusted returns by 25 bp and leads to a 16% decline in the entry of affected firms. Through the lens of a model of entry and advice provision, we show that this effect can be due to both an increase in fixed costs and an increase in the cost of providing low‐quality advice. We show how to disentangle these channels and find that both are empirically relevant. Counterfactual simulations show that further increases in the stringency of fiduciary duty monotonically improve advice quality.

We document the effects of a comprehensive set of mergers of consumer packaged goods manufacturers on prices, quantities, and product assortment. Across specifications, we find a small average price effect of mergers (−0.5−1.1 percent) but substantial heterogeneity, with a standard deviation between 3.9 and 7.6 percentage points. Through a model of enforcement, we find that agencies act as if they challenge mergers they expect would increase prices more than 4.8 to 6.3 percent. Increases in stringency would reduce prices and the prevalence of completed price-increasing mergers, with minimal impacts on blocked price-decreasing mergers, at significantly greater agency burden.