Working Papers

Why Small Firms Fail to Adopt Profitable Opportunities (with Paul Gertler, Sean Higgins and Ulrike Malmendier)


Why do small firms often fail to adopt new profitable opportunities, even in the absence of informational frictions, fixed costs, or misaligned incentives? We explore three potential mechanisms: present bias, memory, and trust in other firms. In partnership with a financial technology (FinTech) company in Mexico, we randomly offer firms that are already users of the payment technology the opportunity to be charged a lower merchant fee for each payment they receive from customers. The median value of the fee reduction is 3% of profits. We randomly vary the size of the fee reduction, whether the firms face a deadline to accept the offer, whether they receive a reminder, and whether we tell them in advance that they will receive a reminder. While deadlines do not affect take-up, reminders increase take-up of the lower fee by 18%, and anticipated reminders by an additional 7%. The results point to limited memory in firms, but not present bias. Additional survey data suggests trust as the mechanism behind the significant additional effect of the anticipated reminder. Upon receiving an anticipated reminder from the FinTech company, firms value the offer more and accept it even if they generally distrust advertised offers.

RCT Registration

Inattention to Earthquake Risk in Home Values


I estimate the impact of earthquake risk on residential home prices. Using USGS earthquake hazard map updates, I find that changes in earthquake risk in a county do not impact its house prices. There is no differential impact in counties with ex-ante higher earthquake risk, counties that experience the largest earthquake risk increase or when the updated earthquake risk reaches a level that can cause moderate potential damages to construction when before it did not. These findings suggest increases in earthquake risk, even when large and potentially damaging to construction, have no causal effect on home values.

Common Ownership in the Loan Market


Firms and banks increasingly have institutional investors as shareholders in common. These shareholders not only receive profits through interest rates, but also benefit from firm profits. In this paper, I first illustrate the implication of firm and bank common ownership on loans in a simple model. I then provide new evidence of the rise and extent of common ownership between firms and banks. I next show that a firm that borrows from a bank with common owners obtains a lower interest rate and a larger loan. I use the growth of index funds as a source of exogenous variation to estimate a plausibly causal link between common ownership and loan terms not confounded by unobserved factors such as strategic investments by active institutional investors. I find that a one standard deviation increase in common ownership leads to a five basis point interest rate decrease and a three percent loan size increase. I show that these loan terms do not go to underperforming firms but to firms that are less likely to receive a credit rating downgrade. I also find that better loan terms are more pronounced for smaller and unrated firms. This suggests that common ownership benefits may be due to decreased information and monitoring frictions for the lender if their shareholders also have access to firm returns and information.

Works in Progress

Green Listings and House Prices (with Sean Flynn)


I teach the following courses at Columbia University:


  • Senior Seminar in Real Estate

  • Financial Economics

I taught the following courses at Baruch College, CUNY:


  • Real Estate Capital Markets

  • Real Estate Finance and Investment

I received the Teaching Excellence Award for the 2020-2021 Academic Year.

I was a Graduate Student Instructor for the following courses at UC Berkeley:


  • Psychology and Economics, Department of Economics


  • Corporate Finance, Haas School of Business