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Data-Driven Mechanism Design: Jointly Eliciting Preferences And Information, Dirk Bergemann, Marek Bojko, Paul Dutting, Renato Paes Leme, Haifeng Xu, Song Zuo Dec 2025

Data-Driven Mechanism Design: Jointly Eliciting Preferences And Information, Dirk Bergemann, Marek Bojko, Paul Dutting, Renato Paes Leme, Haifeng Xu, Song Zuo

Cowles Foundation Discussion Papers

We study mechanism design in environments where agents have private preferences and private information about a common payoff-relevant state. In such settings with multi-dimensional types, standard mechanisms fail to implement efficient allocations. We address this limitation by proposing data-driven mechanisms that condition transfers on additional post-allocation information, modeled as an estimator of the payoff-relevant state. Our mechanisms extend the classic Vickrey–Clarke–Groves framework. We show they achieve exact implementation in posterior equilibrium when the state is fully revealed or utilities are affine in an unbiased estimator. With a consistent estimator, they achieve approximate implementation that converges to exact implementation as the …


Multidimensional Sorting: Comparative Statics, Joe Boerma, Andrea Ottolini, Aleh Tsyvinski Dec 2025

Multidimensional Sorting: Comparative Statics, Joe Boerma, Andrea Ottolini, Aleh Tsyvinski

Cowles Foundation Discussion Papers

In sorting literature, comparative statics for multidimensional assignment models with general output functions and input distributions is an important open question. We provide a complete theory of comparative statics for technological change in general multidimensional assignment models. Our main result is that any technological change is uniquely decomposed into two distinct components. The first component (gradient) gives a characterization of changes in marginal earnings through a Poisson equation. The second component (divergence-free) gives a characterization of labor reallocation. For U.S. data, we quantify equilibrium responses in sorting and earnings with respect to cognitive skill-biased technological change.


Drivers Of Racial Differences In C-Sections, Adriana Corredor-Waldron, Janet Currie, Molly Schnell Dec 2025

Drivers Of Racial Differences In C-Sections, Adriana Corredor-Waldron, Janet Currie, Molly Schnell

Cowles Foundation Discussion Papers

Black mothers with a trial of labor are 25 percent more likely to deliver by C-section than non-Hispanic White mothers. The gap is largest among mothers with the lowest risk and is reduced by only one-fifth when controlling for observed medical risk factors, sociodemographic characteristics, hospital, and physician or medical practice group. Remarkably, the gap disappears when performing a C-section is more costly due to a concurrent pre-labor C-section limiting surgical resources. This finding is consistent with provider discretion—rather than differences in unobserved medical risk—accounting for persistent racial disparities in delivery method. The additional intrapartum C-sections that occur among low-risk …


Information Without Rents: Mechanism Design Without Expected Utility, Ernesto Rivera Mora, Philipp Strack Dec 2025

Information Without Rents: Mechanism Design Without Expected Utility, Ernesto Rivera Mora, Philipp Strack

Cowles Foundation Discussion Papers

We study mechanism design for a sophisticated agent with non-expected utility (EU) preferences. We show that the revelation principle holds if and only if all types are EU maximizers: if at least one type is a non-EU maximizer, randomizing over dynamic mechanisms generates a strictly larger set of implementable allocations than using static mechanisms. Moreover, dynamic stochastic mechanisms can fully extract the private information of any type who doesn’t have uniformly quasi-concave preferences without providing that type any rent. Full-surplus extraction is possible in a broad variety of non-EU environments, but impossible for types with concave preferences.


Regulating Privacy Policies On Digital Platforms, Michele Bisceglia, Alessandro Bonatti, Fiona Scott Morton Nov 2025

Regulating Privacy Policies On Digital Platforms, Michele Bisceglia, Alessandro Bonatti, Fiona Scott Morton

Cowles Foundation Discussion Papers

We study how privacy regulation affects menu pricing by a monopolist platform that collects and monetizes personal data. Consumers differ in privacy valuation and sophistication: naive users ignore privacy losses, while sophisticated users internalize them. The platform designs prices and data collection options to screen users. Without regulation, privacy allocations are distorted and naive users are exploited. Regulation through privacy-protecting defaults can create a market for information by inducing payments for data; hard caps on data collection protect naive users but may restrict efficient data trade.


Probability Pricing, Eduardo Dávila, Cecilia Parlatore, Ansgar Walther Nov 2025

Probability Pricing, Eduardo Dávila, Cecilia Parlatore, Ansgar Walther

Cowles Foundation Discussion Papers

This paper develops probability pricing, extending cash flow pricing to quantify the willingnessto-pay for changes in probabilities. We show that the value of any marginal change in probabilities can be expressed as a standard asset-pricing formula with hypothetical cash flows derived from changes in the survival function. This equivalence between probability and cash flow valuation allows us to construct hedging strategies and systematically decompose individual and aggregate willingness-to-pay. Four applications examine the valuation of changes in the distribution of aggregate consumption, the efficiency effects of varying performance precision in principal-agent problems, and the welfare implications of public and private information.


Marriage, Labor Supply And The Dynamics Of The Social Safety Net, Hamish Low, Costas Meghir, Luigi Pistaferri, Alessandra Voena Nov 2025

Marriage, Labor Supply And The Dynamics Of The Social Safety Net, Hamish Low, Costas Meghir, Luigi Pistaferri, Alessandra Voena

Cowles Foundation Discussion Papers

The 1996 US welfare reform introduced time limits on welfare receipt. We use quasi-experimental evidence and a rich life-cycle model to understand the impact of time limits on different margins of behavior and well-being. We stress the impact of marital status and marital transitions on mitigating the cost and impact of time limits. Time limits cause women to defer claiming in anticipation of future needs and to work more, effects that depend on the probabilities of marriage and divorce. They also cause an increase in employment among single mothers and reduce divorce, but their introduction costs women 0.7% of lifetime …


Relu-Based And Dnn-Based Generalized Maximum Score Estimators, Xiaohong Chen, Wayne Yuan Gao, Likand Wen Nov 2025

Relu-Based And Dnn-Based Generalized Maximum Score Estimators, Xiaohong Chen, Wayne Yuan Gao, Likand Wen

Cowles Foundation Discussion Papers

We propose a new formulation of the maximum score estimator that uses compositions of rectified linear unit (ReLU) functions, instead of indicator functions as in Manski (1975, 1985), to encode the sign alignment restrictions. Since the ReLU function is Lipschitz, our new ReLU-based maximum score criterion function is substantially easier to optimize using standard gradient-based optimization pacakges. We also show that our ReLU-based maximum score (RMS) estimator can be generalized to an umbrella framework defined by multi-index single-crossing (MISC) conditions, while the original maximum score estimator cannot be applied. We establish the n −s/(2s+1) convergence rate and asymptotic normality for …


New Measures For Richer Theories: Some Thoughts And An Example, Orazio Attanasio, Victor Sancibrian, Federica Ambrosio Nov 2025

New Measures For Richer Theories: Some Thoughts And An Example, Orazio Attanasio, Victor Sancibrian, Federica Ambrosio

Cowles Foundation Discussion Papers

For a long time, the majority of economists doing empirical work relied on choice data, while data based on answers to hypothetical questions, stated preferences or measures of subjective beliefs were met with some skepticism. Although this has changed recently, much work needs to be done. In this paper, we emphasize the identifying content of new economic measures. In the first part of the paper, we discuss where the literature on measures in economics stands at the moment. We first consider how the design and use of new measures can help identify causal links and structural parameters under weaker assumptions …


Optimization Via Strategic Law Of Large Numbers, Xiaohong Chen, Zengjing Chen, Wayne Yuan Gao, Xiaodong Yan, Guodong Zhang Oct 2025

Optimization Via Strategic Law Of Large Numbers, Xiaohong Chen, Zengjing Chen, Wayne Yuan Gao, Xiaodong Yan, Guodong Zhang

Cowles Foundation Discussion Papers

This paper proposes a novel framework for the global optimization of a continuous function in a bounded rectangular domain. Specifically, we show that: (1) global optimization is equivalent to optimal strategy formation in a two-armed decision problem with known distributions, based on the Strategic Law of Large Numbers we establish; and (2) a sign-based strategy based on the solution of a parabolic PDE is asymptotically optimal. Motivated by this result, we propose a class of Strategic Monte Carlo Optimization (SMCO) algorithms, which uses a simple strategy that makes coordinate-wise two-armed decisions based on the signs of …


Worker Rights In Collective Bargaining, Benjamin W. Arold, Elliott Ash, W. Bentley Macleod, Suresh Naidu Oct 2025

Worker Rights In Collective Bargaining, Benjamin W. Arold, Elliott Ash, W. Bentley Macleod, Suresh Naidu

Cowles Foundation Discussion Papers

Collective bargaining agreements (CBAs) specify the contractual rights of unionized workers, but their full legal content has not yet been analyzed by economists. This paper develops novel natural language methods to analyze the empirical determinants and economic value of these rights using a new collection of 30,000 CBAs from Canada in the period 1986-2015. We parse legally binding rights (e.g., “workers shall receive. . . ”) and obligations (e.g., “the employer shall provide. . . ”) from contract text, and validate our measures through evaluation of clause pairs and comparison to firm surveys on HR practices. Using timevarying province-level variation …


Slim: Stochastic Learning And Inference In Overidentified Models, Xiaohong Chen, Min Seong Kim, Sokbae Lee, Myung Hwan Seo, Myunghyun Song Oct 2025

Slim: Stochastic Learning And Inference In Overidentified Models, Xiaohong Chen, Min Seong Kim, Sokbae Lee, Myung Hwan Seo, Myunghyun Song

Cowles Foundation Discussion Papers

We propose SLIM (Stochastic Learning and Inference in overidentified Models), a scalable stochastic approximation framework for nonlinear GMM. SLIM forms iterative updates from independent mini-batches of moments and their derivatives, producing unbiased directions that ensure almost-sure convergence. It requires neither a consistent initial estimator nor global convexity and accommodates both fixed-sample and random-sampling asymptotics. We further develop an optional second-order refinement and inference procedures based on random scaling and plug-in methods, including plug-in, debiased plug-in, and online versions of the Sargan–Hansen J-test tailored to stochastic learning. In Monte Carlo experiments based on a nonlinear EASI demand system with 576 moment …


Local Overidentification And Efficiency Gains In Modern Causal Inference And Data Combination, Xiaohong Chen, Haitian Xie Oct 2025

Local Overidentification And Efficiency Gains In Modern Causal Inference And Data Combination, Xiaohong Chen, Haitian Xie

Cowles Foundation Discussion Papers

This paper studies nonparametric local (over-)identification, in the sense of Chen and Santos (2018), and the associated semiparametric efficiency in modern causal frameworks. We develop a unified approach that begins by translating structural models with latent variables into their induced statistical models of observables and then analyzes local overidentification through conditional moment restrictions. We apply this approach to three leading models: (i) the general treatment model under unconfoundedness, (ii) the negative control model, and (iii) the long-term causal inference model under unobserved confounding. The first design yields a locally just-identified statistical model, implying that all regular asymptotically linear estimators of …


Climate Shocks And State Formation: The 1970 Bhola Cyclone And The Birth Of Bangladesh, Sultan Mehmood, Ahmed Mushfiq Mobarak Oct 2025

Climate Shocks And State Formation: The 1970 Bhola Cyclone And The Birth Of Bangladesh, Sultan Mehmood, Ahmed Mushfiq Mobarak

Discussion Papers

State formation through secession often requires two critical steps: building mass support for independence, and engaging in violent conflict against a state resisting territorial loss. Combining satellite data with archival sources, we statistically document how exposure to the 1970 Bhola cyclone in East Pakistan which killed 350,000 people led to a rise in separatist sentiments expressed in voting booths, and later induced citizens to take up arms against the government and engage in guerrilla warfare. We identify the cyclone as a focal point that helped galvanize dispersed separatist sentiments into an organized political movement and war, in part by revealing …


Between Sound And Theology: Timbral Performativity In Brazilian Religious Musicking, Marcell Silva Steuernagel Oct 2025

Between Sound And Theology: Timbral Performativity In Brazilian Religious Musicking, Marcell Silva Steuernagel

Yale Journal of Music & Religion

This article explores the performativity of timbre, summarizing key perspectives from the English-language scholarship on the topic and setting them in conversation with Latin American perspectives on timbre. In addition, it examines a performance of “500 Graus” (500 degrees), a song performed by Brazilian Pentecostal artists Cassiane and Shirley Carvalhaes, to demonstrate how the performativity of timbre unfolds within a particular expression of Latin American religious musicking. In doing so, it investigates the phenomenon of timbre between music and sound studies, and theology and church music studies, providing insights relevant to the study of timbre and the study of religious …


Timbre — A Transcendent Paradox?, Eugenia Siegel Conte Oct 2025

Timbre — A Transcendent Paradox?, Eugenia Siegel Conte

Yale Journal of Music & Religion

Timbre, as ethnomusicologist Cornelia Fales writes, is “paradoxical” precisely because it is one of the most exacting processes in which the human body may sense and comprehend the source of a sound even as that comprehended sound is impossible to describe outside of metaphor or comparison. As one of the more recognizable qualities of sound but the most difficult to describe, timbre allows us to consider physical/emotional (affective) experiences of sound as a key aspect of faith and meditation. In this article, I examine physical-affective intersections of faith and meditation that often are key to praxes of worship, and show …


Singing A Wide Heart: Timbre And Sung Prayer In Senegal’S Layène Community, Margaret L. Rowley Oct 2025

Singing A Wide Heart: Timbre And Sung Prayer In Senegal’S Layène Community, Margaret L. Rowley

Yale Journal of Music & Religion

Layène sung prayer (called sikkar) is embedded within the religious practices of the Layène community, a minority Sufi order in Dakar, Senegal. This article explores the functions of Layène sung prayer, focusing especially on its loud, vibrational timbre. Both men and women vocalists in call-and-response sing loudly, using wide vibrato and electronic amplification to ensure that the sikkar reaches the inhabitants—both human and non-human—in the surrounding community. This article demonstrates that the distinctive timbre of Layène sung prayer serves the spiritual functions of binding the community together in spiritual and social cohesion, increasing individual and collective generosity, and demarcating …


Live Wires: The Angelus Temple And The Timbre Of Power, Catherine Provenzano Oct 2025

Live Wires: The Angelus Temple And The Timbre Of Power, Catherine Provenzano

Yale Journal of Music & Religion

This article is a media history and contemporary case study of The Angelus Temple in Los Angeles, founded by Aimee Semple McPherson in 1923. My analysis of the Angelus insists upon the centrality of a hyperaudible paradigm of worship that uses media to maximize the legibility of a Christian message, and, more than this, imagines that media itself as a living soul in need of redemption. Many contemporary megachurches employ savvy applications of sound and sound transmission as instruments of belonging as well as action, and these rely on high-budget investments in church infrastructure, software and personnel. I argue that …


Performing "Manly" Worship Music: Gender And Timbre At Mars Hill Church, Maren Haynes Marchesini Oct 2025

Performing "Manly" Worship Music: Gender And Timbre At Mars Hill Church, Maren Haynes Marchesini

Yale Journal of Music & Religion

Ten years ago, Mars Hill boasted fifteen campuses and 15,000 members. Amid mounting allegations of abuse and mismanagement leveled against founding pastor Mark Driscoll, the church famously collapsed, closing its doors at the end of 2014. Driscoll had built Mars Hill’s core brand around his opposition to the perceived feminization of the Christian mainstream, and appointing himself the “leader of a heterosexual male backlash” in the church and broader culture. While Driscoll’s muscular Christianity stands in a wide historical stream, Mars Hill long led the charge in establishing a youth-oriented, hipster brand of hypermasculine Calvinism. And while rhetoric and theology …


A Sunlit Ambience: How Reverb Pedals Influence The Contemporary Worship Music Imagination, Dylan Crosson Oct 2025

A Sunlit Ambience: How Reverb Pedals Influence The Contemporary Worship Music Imagination, Dylan Crosson

Yale Journal of Music & Religion

With the recent proliferation of scholarship on the musical elements of Contemporary Worship Music (CWM) in addition to ethnographies exploring the tradition’s inner machinations, readers now enjoy unprecedented levels of insight into the actions of human actors and their music. But what of CWM’s non-human actors? Could the instruments and musical equipment used by CWM practitioners, for example, impact evangelical piety? In this article, I entertain this question by arguing that the materiality of reverb pedals—devices used by guitarists to add artificial reverberation to their sound—influences how evangelicals conceptualize elements of their faith by introducing new imagery or enriching pre-existing …


From The Heaviest, Dirtiest Depths To The Washy Ambient Clouds: Guitar Timbre In/As Schismogenesis In North American Christianity, Joshua K. Busman, Nathan Myrick Oct 2025

From The Heaviest, Dirtiest Depths To The Washy Ambient Clouds: Guitar Timbre In/As Schismogenesis In North American Christianity, Joshua K. Busman, Nathan Myrick

Yale Journal of Music & Religion

This essay argues that within the socio-cultural context of North American Christianity, the timbral qualities of electric guitar, with its long lineage as a site of cultural values conflict and identity negotiation, serves a theological function in the emerging and cohering sonority of digital worship. Using as comparative case studies the timbral qualities of delay and ambience as promoted and sold by Worship Tutorials as representing normative sonic values for these Christians, on the one hand, and the dialectic and schismatic deployment of distortion by the band My Epic on the other, we suggest that these timbral qualities become important …


Sounds Like 'Saudade': Eschatological Echoes In Brazilian 'Gospel' Music, Fernando Berwig Silva Oct 2025

Sounds Like 'Saudade': Eschatological Echoes In Brazilian 'Gospel' Music, Fernando Berwig Silva

Yale Journal of Music & Religion

This paper analyzes the song “Saudade” by the Brazilian gospel singer Stella Laura. In the song, I argue that Stella Laura uses Brazilian timbral markers from the Sertanejo and Gospel Brazilian music genres to articulate a unique perspective on eschatology, one that is based on the affective structure of the Lusophone word ‘saudade.’ Furthermore, I contend that the song, rooted in the Brazilian nostalgic sertanejo music tradition, leans on stylistic and timbral tools to communicate the idea of saudade from heaven. Beyond lyrics that feature theological notions of origin, identity, and nostalgia, Stella Laura’s song employs timbral, poetic, …


Introduction: The Power Of Timbre In Religion, Bo Kyung Blenda Im, Nathan Myrick Oct 2025

Introduction: The Power Of Timbre In Religion, Bo Kyung Blenda Im, Nathan Myrick

Yale Journal of Music & Religion

How might attending to timbre shift the boundaries of the experiences and practices that come under the analytical purview of religion? What timbral qualities render prayer efficacious and invite divine encounter? What cosmological claims and social relations are forwarded through sounds invoked in religious rituals and gatherings? How do marginalized voices and instruments shape worshipping communities? On the other hand, how are dominant identities and attendant structures reified through religiously marked timbre? Such questions about the character of sounds and their implications for religion animate this issue of the Yale Journal of Music & Religion.


Safely Exploring Novel Actions In Recommender Systems Via Deployment-Efficient Policy Learning, Haruka Kiyohara, Yusuke Narita, Yuta Saito, Kei Tateno, Takuma Udagawa Oct 2025

Safely Exploring Novel Actions In Recommender Systems Via Deployment-Efficient Policy Learning, Haruka Kiyohara, Yusuke Narita, Yuta Saito, Kei Tateno, Takuma Udagawa

Cowles Foundation Discussion Papers

In many real recommender systems, novel items are added frequently over time. The importance of sufficiently presenting novel actions has widely been acknowledged for improving long-term user engagement. A recent work builds on Off-Policy Learning (OPL), which trains a policy from only logged data, however, the existing methods can be unsafe in the presence of novel actions. Our goal is to develop a framework to enforce exploration of novel actions with a guarantee for safety. To this end, we first develop Safe Off-Policy Policy Gradient (Safe OPG), which is a model-free safe OPL method based on a high confidence off-policy …


Lessons Learned: Katalin Mérő, Salil Gupta Oct 2025

Lessons Learned: Katalin Mérő, Salil Gupta

Journal of Financial Crises

Between 1990 and 2010, Katalin Mérő served in various roles for Hungary’s central bank, Magyar Nemzeti Bank, and the Hungarian Financial Supervisory Authority. She led the Economics, Risk Assessment, and Regulatory Directorate between 2005 and 2019 and was the deputy head of the Financial Stability Department. She was also a member of the Joint Board of Appeal of European Supervisory Authority from 2011 to 2021. Mérő graduated from the Corvinus University of Budapest and received a PhD in 2005 from the Budapest University of Technology and Economics. Since 2016, she has served as an associate professor at Budapest Business School, …


Lessons Learned: Anthony Dowd, Mercedes Cardona Oct 2025

Lessons Learned: Anthony Dowd, Mercedes Cardona

Journal of Financial Crises

Anthony Dowd was an investment banker when former Federal Reserve Chairman Paul Volcker recruited him during the Global Financial Crisis (GFC) to be his chief of staff for the President’s Economic Recovery Advisory Board (PERAB). As chairman of the PERAB, Volcker proposed what would become known as the Volcker Rule, a series of guardrails meant to curb banks’ involvement in proprietary trading and investing in private equity or hedge funds; they were adopted in the Dodd-Frank Act of 2010. When Chairman Volcker founded the Volcker Alliance in 2013, Dowd became a director and its first treasurer. The alliance is a …


Lessons Learned: Grahame Johnson, Mercedes Cardona Oct 2025

Lessons Learned: Grahame Johnson, Mercedes Cardona

Journal of Financial Crises

Grahame Johnson was named managing director of financial stability at the Bank of Canada in November 2019, just months before the outbreak of the COVID-19 pandemic, and became adviser to the governor in 2021. The Bank of Canada responded to the economic effect of the pandemic by launching 10 liquidity facilities—nine of them never attempted before—to repurchase securities such as government and corporate bonds, bank acceptances, and commercial paper. The measures were largely successful, and nine of the 10 facilities were unwound by 2022. The tenth, the Government of Canada Bond Purchase Program (GBPP), transitioned into a quantitative easing program …


What Policy Combinations Worked?: The Effect Of Policy Packages On Bank Lending During Covid-19, Divya Kirti, Maria Soledad Martinez Peria, Prachi Mishra, Jan Strasky Oct 2025

What Policy Combinations Worked?: The Effect Of Policy Packages On Bank Lending During Covid-19, Divya Kirti, Maria Soledad Martinez Peria, Prachi Mishra, Jan Strasky

Journal of Financial Crises

In response to COVID-19, countries frequently adopted multiple types of policies to address the economic and financial effects of the pandemic. This paper analyzes the impact on bank lending of combinations or packages of policies (fiscal, monetary, and prudential) adopted across a broad sample of countries. Using a comprehensive policy announcement–level dataset together with bank-level information, we find that lending grew faster at banks in countries that announced large packages combining fiscal, monetary, and prudential measures (“all-out” packages), especially when uncertainty was high. Both the scope and size of policy packages were important: packages combining all three types of policies, …


Lessons Learned: Stijn Claessens, Owen Heaphy Oct 2025

Lessons Learned: Stijn Claessens, Owen Heaphy

Journal of Financial Crises

After two decades at the World Bank, Stijn Claessens served as assistant director in the research department of the International Monetary Fund (IMF) from 2007 to 2014. From 2015 to early 2017, Claessens was senior adviser in the Division of International Finance at the Federal Reserve Board (Fed), before joining the Bank for International Settlements (BIS) as head of financial stability policy and deputy head of the monetary and economic department in 2017. Claessens left the BIS in September 2023 and is now an executive fellow with the Yale Program for Financial Stability. This Lessons Learned is based on an …


Stressing The Stress Tests, Natasha Sarin, Til Schuermann Oct 2025

Stressing The Stress Tests, Natasha Sarin, Til Schuermann

Journal of Financial Crises

In the spring of 2023, Silicon Valley Bank, Signature Bank, and First Republic Bank failed, owing to predictable rate hikes by the Federal Reserve. It’s clear from these recent events that the current US stress-testing system is ill-suited to mitigate risk associated with the banking system, especially when looking at smaller regional banks that aren’t subjugated to annual stress testing. Stress testing as a regulatory tool is also exposed to significant legal risks following recent Supreme Court jurisprudence that draws into question the viability of the status quo. Today, regulators and other interested parties must change tacks to craft a …