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Uploaded: Jan 18, 2025

Hongda Zhong | Working Paper No. 00146-00

Optimal Integration: Human, Machine, and Generative AI

I study the optimal integration of humans and technologies in multi-layered decision-making processes. Each layer can correct existing errors but may also introduce new ones. A one-dimensional quality metric – a decision-maker’s error correction capability normalized by its new errors...

Uploaded: Nov 22, 2024

William Fuchs, Satoshi Fukuda | Working Paper No. 00145-00

Rules versus Disclosure: Prudential Regulation and Market Discipline

We study the joint design of two prominent micro-prudential policy tools: bank
regulation that enforces operational standards via rules, and market discipline through
information disclosure. Disclosure can be state-contingent but creates a trade-off between
incentives and the ex-post...

Uploaded: Nov 21, 2024

Lin William Cong (å¢ęž—), Yuanyu Qu, Guojun Wang | Working Paper No. 00144-00

Blockchain for Environmental Monitoring: Theory and Empirical Evidence from China

We present the first piece of empirical evidence on blockchain adoption for environmental monitoring. Using a staggered difference-in-difference (DID) framework, we find that the concentrations of SO2, NO2, CO in blockchain adopting cities in China are on average lower by...

Uploaded: Nov 21, 2024

Lin William Cong (å¢ęž—), Xiaohong Huang, Siguang Li, Jian Ni | Working Paper No. 00143-00

Cournot Competition, Informational Feedback, and Real Efficiency

We revisit the relationship between firm competition and real efficiency in a novel setting with informational feedback from financial markets. While intensified competition can decrease market concentration in production, it reduces the value of proprietary information (on, e.g., market prospects)...

Uploaded: Nov 21, 2024

Lin William Cong (å¢ęž—), Qing Chang, Liyong Wang, Longtian Zhang | Working Paper No. 00135-01

Production, Trade, and Cross-Border Data Flows

We build a tractable general equilibrium model to analyze the effects of cross-border data flows and pre-existing development gaps in data economies on each country's production and international trade. Raw data as byproducts of consumption can be transformed into various...

Uploaded: Nov 21, 2024

Lin William Cong (å¢ęž—), Douglas Xu | Working Paper No. 00133-01

The Rise of Factor Investing: Asset Market Implications and "Passive" Security Design

We model financial innovations such as Exchange-Traded Funds, smart beta products, and many index-based vehicles as composite securities (CSs) that facilitate trading the common factors in assets' liquidation values. Through accessing a larger basket of assets in endogenously chosen proportions,...