This study investigates how occupational AI exposure impacts employment at the intensive margin, i.e., the length of workdays and the allocation of time between work and leisure. Drawing on individual-level time diary data from 2004-2023, we find that higher AI exposure--whether stemming from...

Applied general-equilibrium (AGE) models have often made compromises to circumvent difficult modeling problems. One of these is avoiding endogenous zeros, ruling out important questions. Traditional perfect competition models: when do technologies or trade links switch from active to inactive or...

This paper studies the role of commitment in the design of enforcement mechanisms when enforcement can remedy harm from non-compliance. We consider a game between an enforcement authority ("enforcer") and an offender in which either the enforcer or the offender may act as a Stackelberg leader....

Monetary and financial policies that lower the cost of credit for working capital in a currency outside of its country can provide the impetus for that currency to be used in international trade. This paper shows this in theory, by exploring the complemen-tarity in the currency used for...

Bayesian consumers infer that hidden add-on prices (e.g. the cost of ink for a printer) are likely to be high prices. If consumers are Bayesian, firms will not shroud information in equilibrium. However, shrouding may occur in an economy with some myopic (or unaware) consumers. Such shrouding...

Consider a durable goods producer that potentially has market power in the aftermarkets associated with its products. An important question is to what extent, if any, should the antitrust laws restrict the firm's behavior in these aftermarkets? In this paper we explore a number of models...

The question of whether two drugs - namely alcohol and tobacco - are used as complements or substitutes is of crucial interest if side-effects of anti-smoking policies are considered. Numerous papers have empirically addressed this issue by estimating demand systems for alcohol and tobacco and...

We introduce permanently-shifting income shares into a standard growth model with two types of agents. Capital owners represent the top quintile of U.S. households while workers represent the remainder. Our tractable model allows us to exactly replicate the observed U.S. time paths of the top...

This paper discusses the occurrence of Skill-Enhancing Technology Import (SETI), namely the relationship between imports of embodied technology and widening skill-based employment differentials in a sample of low and middle income countries (LMICs). In doing so, this paper provides a direct...

We test whether firms use incompatibility strategically, using data from ATM markets. High ATM fees degrade the value of competitors' deposit accounts, and can in principle serve as a mechanism for siphoning depositors away from competitors or for creating deposit account differentiation. Our...

Monetary and financial policies that lower the cost of credit for working capital in a currency outside of its country can provide the impetus for that currency to be used in international trade. This paper shows this in theory, by exploring the complementarity in the currency used for financing...

Access to a platform's services often requires consumers to use a complementary hardware product or service, e.g., Internet service is needed to access the YouTube platform. Typically, such access products are provided by third-party firms. More recently, however, some major platforms like...

I generalize a benchmark model of directed technical change to allow innovations and factors of production (here energy resources) to be substitutes or complements. I show that a dominant sector is forever locked-in under substitutability but researchers' market incentives can drive a transition...

In this paper, we consider an experience composite good, each of whose components is produced by independent firms sharing the information about the quality. We obtain two main results. First, if the production costs are equal across qualities, the undistorted equilibrium is the unique...

We explore existence and properties of equilibrium when N ≥ 2 bidders compete for L ≥ 2 objects via simultaneous but separate auctions. Bidders have private combinatorial valuations over all sets of objects they could win, and objects are complements in the sense that these valuations are...

We set up a model to analyze the effects of mergers between sellers of complementary components where firms invest in compatibility and can engage in bundling. We consider the impact of merger on prices, investment and consumer surplus. We also analyse when the merged firm may have an incentive...

We investigate how asymmetric information on final demand affects strategic interaction between a downstream monopolist and a set of upstream monopolists, who independently produce complementary inputs. We study an intrinsic private common agency game in which each supplier i independently...

Products often bundle together many functions e.g., smartphones. The firm develops the big idea (which functions to bundle) and then chooses one supplier per function. We develop a model featuring holdup in which the firm's bargaining power declines in the number of suppliers. Greater scope as...

Products often bundle together many functions e.g., smartphones. The firm develops the big idea (which functions to bundle) and then chooses one supplier per function. We develop a model featuring holdup in which the firm's bargaining power declines in the number of suppliers. Greater scope as...

The purpose of this chapter is to use the theory of bottlenecks laid out in previous chapters to better understand the dynamics of an open standards-based platform. I describe how the Wintel platform evolved from 1990 through 2000 under joint sponsorship of Intel and Microsoft. I first describe...

In this article we describe and test a theory of complementarities between design-manufacturing integration (DMI) and usage of advanced manufacturing technologies (AMT). This study extends prior AMT research by examining the role of complementary assets in explaining how AMTadoption contributes...

We extend the control function approach of Altonji and Mansfield (2018) to allow for multiple group levels and complementarities. Our analysis provides a foundation for causal interpretation of multilevel mixed effects models in the presence of sorting. In our empirical application, we obtain...

This paper studies the welfare effect of product incompatibility in complementary goods markets. Complementary goods are often incompatible across brands. Incompatibility imposes a choice constraint and increases consumers' costs of switching or upgrading. Firms take advantage of incompatibility...

Public goods may exhibit complementarities that are essential for determining their individual value. Our results indicate that improving safety near parks can turn them from public bads to goods. Ignoring complementarities may lead to i) undervaluing the potential value of public goods; ii)...

Public goods may exhibit complementarities that are essential for determining their individual value. Our results indicate that improving safety near parks can turn them from public bads to goods. Ignoring complementarities may lead to i) undervaluing the potential value of public goods; ii)...

We extend the control function approach of Altonji and Mansfield (2018) to allow for multiple group levels and complementarities. Our analysis provides a foundation for causal interpretation of multilevel mixed effects models in the presence of sorting. In our empirical application, we obtain...