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Working Paper
The Rise of AI Pricing: Trends, Driving Forces, and Implications for Firm Performance
We document key stylized facts about the time-series trends and cross-sectional distributions AI pricing and study its implications for firm performance, both on average and in response to monetary policy shocks. We use the online job postings data from Lightcast to measure the adoption of AI pricing. We infer that a firm is adopting AI pricing if it posts a job that requires AI-related skills and contains the keyword “pricing.” At the aggregate level, the share of AI pricing jobs in all pricing jobs has increased more than tenfold since 2010. The rise of AI pricing jobs has been ...
Working Paper
Incomplete Information and Irreversible Investment
How do information frictions and investment frictions interact? We use a continuous-time model to analytically characterize how incomplete information distorts firms’ decision rules and stationary distribution when investment is irreversible. The two frictions interact in rich and substantial ways. At the firm level, noisier information shrinks a firm’s inaction region and reduces the elasticity of investment to productivity. In the aggregate, incomplete information increases steady-state capital, exacerbates capital misallocation, and mitigates the impact of productivity shocks on ...