Organizations & Markets

Along with its interrelated companion volume, The Content, Impact, and Regulation of Streaming Video, this book covers the next generation of TV—streaming online video, with details about its present and a broad perspective on the future. It reviews the new technical elements that are emerging, both in hardware and software, their long-term trend, and the implications. It discusses the emerging ‘media cloud’ of video and infrastructure platforms, and the organizational form of such TV.

Using a unique setting where stand-alone banks submit filings to bank regulators instead of to the SEC, we examine the consequences of fragmented securities regulation on disclosure compliance and information-processing costs. Consistent with the theory that bank regulators are less concerned about transparency than the SEC is, we find that bank regulators’ disclosure requirements are laxer, and stand-alone banks are more likely to violate filing deadlines.

We study the descriptiveness of the “unravelling” prediction in the 1890s streetcar industry. In this historical setting, capital-intensive streetcar companies gain the opportunity to disclose their earnings to dispersed investors via a new, quarterly newspaper supplement. We document that a quarter of the companies withhold their earnings from the first supplement, inconsistent with the “unravelling” prediction.

Utilizing transaction-level financial data, we explore how household consumption responded to the onset of the COVID-19 pandemic. As case numbers grew and cities and states enacted shelter-in-place orders, Americans began to radically alter their typical spending across a number of major categories. In the first half of March 2020, individuals increased total spending by over 40% across a wide range of categories.

Since 1980, economic growth in the U.S. has been fastest in its largest cities. We show that a group of skill- and information-intensive service industries are responsible for all of this new urban bias in recent growth. We then propose a simple explanation centered around the interaction of three factors: the disproportionate reliance of these services on information and communication technology (ICT), the precipitous price decline for ICT capital since 1980, and the preexisting comparative advantage of cities in skilled services.

A principal faces an agent who is better informed but biased toward higher actions. She can verify the agent's information and specify his permissible actions. We show that if the verification cost is small enough, a threshold with an escape clause (TEC) is optimal: the agent either chooses an action below a threshold or requests verification and the efficient action above the threshold. For higher costs, however, the principal may require verification only for intermediate actions, dividing the delegation set.

The largest economic cost of the COVID-19 pandemic could arise from changes in behavior long after the immediate health crisis is resolved. A potential source of such a long-lived change is scarring of beliefs, a persistent change in the perceived probability of an extreme, negative shock in the future. We show how to quantify the extent of such belief changes and determine their impact on future economic outcomes. We nd that the long-run costs for the U.S. economy from this channel is many times higher than the estimates of the short-run losses in output.

We study the nature of firm pay dynamics using matched employer-employee and firm financials data from Sweden. To this end, we propose and estimate a statistical model that extends the seminal framework by Abowd, Kramarz, and Margolis (1999b) to account for idiosyncratically time-varying firm pay policies. We validate the model by showing that firm-year pay estimates are systematically related to measures of firm performance.