AI@CBS

We examine innovation after the Great Depression using data on a century’s worth of U.S. patents and a difference-in-differences design that exploits regional variation in the severity of the economic crisis. Harder-hit areas experienced large and persistent declines in independent patenting, which lasted for the next 70 years. This decline was larger for young and inexperienced inventors and lower-quality patents. In contrast, large firms had relative innovation increases, especially for inventors with the largest declines in independent patenting.

Online allocation problems with resource constraints are central problems in revenue management and online advertising. In these problems, requests arrive sequentially during a finite horizon and, for each request, a decision maker needs to choose an action that consumes a certain amount of resources and generates reward. The objective is to maximize cumulative rewards subject to a constraint on the total consumption of resources.

Bitcoin provides its users with transaction-processing services which are similar to those of traditional payment systems. This article models the novel economic structure implied by Bitcoin’s innovative decentralized design, which allows the payment system to be reliably operated by unrelated parties called miners. We find that this decentralized design protects users from monopoly pricing. Competition among service providers within the platform and free entry imply no entity can profitably affect the level of fees paid by users.

In modern equity markets, participants have a choice of many exchanges at which to trade. Exchanges typically operate as electronic limit order books under a "price-time" priority rule and, in turn, can be modeled as multi-class FIFO queueing systems. A market with multiple exchanges can be thought of as a decentralized, parallel queueing system. Heterogeneous traders that submit limit orders select the exchange, i.e., the queue, in which to place their orders by trading off financial considerations against anticipated delays until their orders may fill.

If you were to ask a discretionary investment fund manager to draw a Venn diagram of the set notation where digitalization meets discretionary investing, many would not show the sets as overlapping. Moreover, they believe that the investment world is bifurcated and the discretionary managers are independent of the quantitative. I would argue that not only are the two sets converging but that the quantitative managers pose an existential threat to the discretionary managers, or perhaps will ‘Pac-Man’-style consume the discretionary managers.

We evaluate the impacts of tax policy on asset returns using the U.S. municipal bond market. In theory, tax-induced ownership segmentation limits risk-sharing, creating downward-sloping regions of the aggregate demand curve for the asset. In the data, cross-state variation in tax privilege policies predicts differences in in-state ownership of local municipal bonds; the policies create incentives for concentrated local ownership. High tax privilege states have muni-bond yields that are more sensitive to variations in supply and local idiosyncratic risk.

We develop a flexible content-based search model that links the content preferences of search engine users to query search volume and click-through rates, while allowing content preferences to vary systematically based on the context of a search. Content preferences are defined over latent topics that describe the content of search queries and search result descriptions.

Narratives, and other forms of discourse, are powerful vehicles for informing, entertaining, and making sense of the world. But while everyday language often describes discourse as moving quickly or slowly, covering a lot of ground, or going in circles, little work has actually quantified such movements or examined whether they are beneficial.