I am a Visiting Assistant Professor of Finance at MIT Sloan. I received my Ph.D. from Stanford University and M.Sc. from the London School of Economics. My research is focused on household and corporate finance, using large-scale field experiments.
Publications
Consumption Response to Credit Expansions: Evidence from Experimental Assignment of 45,307 Credit Lines solo-authored American Economic Review, 2022, 112 (1), Lead Article
I design a large-scale field experiment that constructs a randomized credit limit extension isolating selection, anticipation, wealth, and interest rate effects and study the impulse responses on spending, contract choice, and balance sheets. Participants borrow to spend 11 cents on the dollar in the quarter of the limit increase, with a cumulative difference of 28 cents by the third year. The effects extend to those far from the limit, those who had the new limits as available credit, and those with a meaningful buffer of liquid assets. Participants near their limits borrow and spend when limits are relaxed but put off spending and save out of constraints under the counterfactual when limits are tight. The findings provide strong support for a buffer-stock interpretation that emphasizes the importance of precautionary saving.
When Fair Isn't Fair: Understanding Choice Reversals Involving Social Preferences with Jim Andreoni, Blake Barton, Douglas Bernheim and Jeffrey Naecker Journal of Political Economy, 2020, 128 (5)
In settings with uncertainty, tension exists between ex ante and ex post notions of fairness. Subjects in an experiment most commonly select the ex ante fair alternative ex ante and switch to the ex post fair alternative ex post. One potential explanation embraces consequentialism and construes reversals as time inconsistent. Another abandons consequentialism in favor of deontological (rule-based) ethics and thereby avoids the implication that revisions imply inconsistency. We test these explanations by examining contingent planning and the demand for commitment. Our findings suggest that the most common attitude toward fairness involves a time-consistent preference for applying a naive deontological heuristic.
Precautionary Debt Capacity with Olivia Kim
Under revision for Econometrica
A central theme in macroeconomics and finance is that firms' investment and growth depend on their ability to raise financing. In a field experiment that randomly increases debt limits for firms with similar characteristics, investment and sales increase by 79 cents and 2.75 dollars on the dollar. Firms with low ex-ante default risk – those with low debt burdens and high "distance to debt limits" – explain 98 percent of the sales response, and yet, their borrowing increases only moderately. This heterogeneous response supports models in which the interplay between precautionary motives and financing frictions amplifies fluctuations in investment and output.
Best Paper Award, Red Rock Finance Conference, 2024
Forbearance vs. Interest Rates: Experimental Tests of Liquidity and Strategic Default Triggers solo-authored
Under revision for Journal of Financial Economics
I study a randomized debt relief experiment and present three findings regarding default triggers and how relief affects these triggers. First, liquidity is important but not the sole trigger of default: delinquencies are most responsive to a rate reduction despite entailing the smallest payment reduction. Second, compatible with strategic behavior, borrowers default in response to future payments independent of liquidity and accounting solvency. Third, the extent of strategic behavior reflects the extent of borrowing constraints. These findings align with models positing a single strategic default trigger shaped by constraints. I discuss implications for targeting relief and modeling interest rate pass-through.
We study whether a bank’s internal capital market allocates capital efficiently across branches. Using a large-scale randomized pricing experiment on approximately 50,000 loan applications, we identify the marginal return on capital for each branch group — the change in profit per dollar of capital allocated. We find that total lending is close to its optimal scale, but marginal returns are not equalized across branch groups, implying potential reallocation gains of 8.4% of profits. The bank’s uniform pricing policy — charging the same spread across all branches conditional on credit score — impedes price-based reallocation.
Algorithmic lending has led to a rise in personalized pricing reflecting information beyond the credit score. We study the welfare effects of pricing on increasingly granular information. We use a randomized pricing experiment and causal machine learning to estimate demand and cost curves and embed them in competitive equilibrium. Finer pricing need not improve welfare: relative to uniform pricing, credit-score pricing reduces total surplus, as prices increase in adversely selected low-score pools, pushing out safest borrowers. Personalization improves on the score by separating observables predicting risk levels from those predicting selection, but uniform pricing dominates, as lending gains remain modest.
