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Report
Market Structure and Monetary Non-neutrality
I propose an equilibrium menu cost model with a continuum of sectors, each consisting of strategically engaged firms. Compared to a model with monopolistically competitive sectors that is calibrated to the same data on good-level price flexibility, the dynamic duopoly model features a smaller inflation response to monetary shocks and output responses that are more than twice as large. The model also implies (i) four times larger welfare losses from nominal rigidities, (ii) smaller menu costs and idiosyncratic shocks are needed to match the data, (iii) a U-shaped relationship between market ...
Working Paper
An Analysis of Revenues at the Comédie française, 1680-1793
I study the business practices of the Comdie franaise, the main theater in Paris, between 1680 and 1793. The theater was an actors? partnership and operated within a (contested) oligopoly. Newly available data provide revenues by price category for over 32,000 performances. Attendance varied considerably from one performance to the next. Total revenues increased in the second half of the 18th century as demand for entertainment in Paris boomed. The increase came in part from box rentals (by performance or by season). Pricing practices changed over time, as premium pricing for high-demand ...
Report
Natural Centralization in Decentralized Finance
Can centralization arise absent barriers to entry? We confront this question by studying the Ethereum blockchain, a market featuring permissionless entry, standardized protocols, and a transparent public ledger. We show that natural centralization emerges when information asymmetry confronts risk-sharing. Using a novel dataset distinguishing private from public order flow, we find that a 1 percent increase in the value of private information causally increases an intermediary’s profit share by 0.57 percent. We use a dynamic bargaining model to illustrate that intermediaries leverage private ...
Working Paper
Expenditures, Earnings, and Net Worth of the Comédie Française, 1723–1793
I study the expenditures of the Comédie française from 1759 to 1793 and the company’s debt from 1723 to 1793. Expenditures were well controlled and changes in venues account for their increase over time. The debt, however, was less controlled, because of the company’s partnership structure and the incentives it created for actors to compensate with debt any shortfall in income due to low tickets sales or delayed payments from the king. I analyze the debt instruments used and the social background of the lenders. I also study the total income of individual actors and the earnings profile ...