In 2019, Chinese stock market regulators launched a comprehensive reform of the IPO regulatory system, transitioning from the approval system to the registration system. Using this reform as a quasi-natural experiment, we investigate the impact of IPO systems on market manipulation. We find that the registration system reform significantly inhibits market manipulation by improving the quality of firms’ information supply and reducing stock information asymmetry. In addition, our results indicate that the inhibitory effect of the registration system reform on market manipulation is more pronounced for firms with higher information exposure, greater information complexity, and a greater proportion of investors with better ability to interpret information. Further analyses show that the registration system reform also lowers trading values around manipulation events, and inhibits other types of trade-based manipulation and misconduct. This study sheds light on the crucial role of information transparency in financial markets’ effectiveness and investor protection.

This paper examines the effect of creditor protection on the choice of government procurement contract types. We use the staggered adoption of anti-recharacterization laws (ARLs) as a quasi-natural experiment to investigate the research question. ARLs strengthen creditors’ rights to repossess collateral in bankruptcy and thus enhance creditor protection. Using a dataset of U.S. government contracts, we find a significant shift from the use of fixed-price contracts to cost-plus contracts after the adoption of ARLs. The effect is more pronounced for firms with higher default risk and stronger firm-government ties. We also find that the government is more likely to switch away or reduce the contract value for contractors affected by ARLs. Overall, our findings point to an important relation between debt contracts and government contracts.

To explore the effects of different incentives on crowdsourcing participation and submission quality, we conduct a randomized field experiment on Taskcn, a large Chinese crowdsourcing site using mechanisms with features of an all-pay auction. In our study, we systematically vary the size of the reward as well as the presence of a soft reserve, or early high-quality submission. We find that a higher reward induces significantly more submissions and submissions of higher quality. In comparison, we find that high-quality users are significantly less likely to enter tasks where a high-quality solution has already been submitted, resulting in lower overall quality in subsequent submissions in such soft reserve treatments. Data, as supplemental material, are available at http://dx.doi.org/10.1287/mnsc.2013.1845 . This paper was accepted by Uri Gneezy, behavioral economics.

Gifts are important instruments for forming bonds in interpersonal relationships. Our study analyzes the phenomenon of gift contagion in online groups. Gift contagion encourages social bonds by prompting further gifts; it may also promote group interaction and solidarity. Using data on 36 million online red packet gifts on a large social site in East Asia, we leverage a natural experimental design to identify the social contagion of gift giving in online groups. Our natural experiment is enabled by the randomization of the gift amount allocation algorithm on the platform, which addresses the common challenge of causal identification in observational data. Our study provides evidence of gift contagion: On average, receiving one additional dollar causes a recipient to send 18 cents back to the group within the subsequent 24 hours. Decomposing this effect, we find that it is mainly driven by the extensive margin: more recipients are triggered to send red packets. Moreover, we find that this effect is stronger for “luckiest draw” recipients, suggesting the presence of a group norm regarding the next red packet sender. Finally, we investigate the moderating effects of group- and individual-level social network characteristics on gift contagion as well as the causal impact of receiving gifts on group network structure. Our study has implications for promoting group dynamics and designing marketing strategies for product adoption. This paper was accepted by Axel Ockenfels, behavioral economics and decision analysis. Funding: T. Liu was supported by Natural Science Foundation of China [Grant 72222005] and Tsinghua University [Grant 2022Z04W01032]. J. Tang was supported by Natural Science Foundation of China for Distinguished Young Scholar [Grant 61825602]. Supplemental Material: The data files and online appendices are available at https://doi.org/10.1287/mnsc.2023.4906 .