Search Fatigue

Consumer search is not only costly but also tiring. We characterize the intertemporal effects that search fatigue has on oligopoly prices, product proliferation, and the provision of consumer assistance (i.e., advice). These effects vary based on whether search is all-or-nothing or sequential in nature, whether learning takes place, and whether consumers exhibit brand loyalty. We perform welfare analysis and highlight the novel empirical implications that our analysis generates.

Obfuscation, Learning, and the Evolution of Investor Sophistication

Investor sophistication has lagged behind the growing complexity of retail financial markets. To explore this, we develop a dynamic model to study the interaction between obfuscation and investor sophistica- tion in mutual fund markets. Taking into account different learning mechanisms within the investor population, we characterize the op- timal timing of obfuscation for financial institutions who offer retail products. We show that educational initiatives that are directed to fa- cilitate learning by investors may induce providers to increase wasteful obfuscation, further disorienting investors and decreasing overall wel- fare. Obfuscation decreases with competition among firms, since the information rents from obfuscation dissipate as each institution attracts a smaller market share

Legal Protection in Retail Financial Markets

Given the importance of sound advice in retail financial markets and the fact that financial institutions outsource their advice services, what legal rules maximize social welfare in the market? We address this question by posing a theoretical model of retail markets in which a firm and a broker face a bilateral hidden action problem when they service clients in the market. All participants in the market are rational, and prices are set based on consistent beliefs about equilibrium actions of the firm and the broker. We characterize the optimal law within our modeling context, and derive how the legal system splits the blame between parties to the transaction. We also analyze how complexity in assessing clients and conflicts of interest affect the law. Since these markets are large, the implications of the analysis have great welfare import.

Fear and Loathing in Las Vegas: Evidence from Blackjack Tables

Psychologists study regret primarily by measuring subjects' attitudes in laboratory experiments. This does not shed light on how expected regret affects economic actions in market settings. To address this, we use proprietary data from a blackjack table in Las Vegas to analyze how expected regret affects peoples''decisions during gambles. Even among a group of people who choose to participate in a risk-taking activity, we find strong evidence of an economically significant omission bias: players incur substantial losses by playing too conservatively. This behavior is prevalent even among large stakes gamblers, and becomes more severe following previous aggressive play, suggesting a rebound effect after aggressive play.

When Does Libertarian Paternalism Work?

We develop a theoretical model to study the effects of libertarian paternalism on knowledge acquisition and social learning. Individuals in our model are permitted to appreciate and use the information content in the default options set by the government. We show that in some settings libertarian paternalism may decrease welfare because default options slow information aggregation in the market. We also analyze what happens when the government acquires imprecise information about individuals, and characterize its incentives to avoid full disclosure of its information to the market, even when it has perfect information. Finally, we consider a market in which individuals can sell their information to others and show that the presence of default options causes the quality of advice to decrease, which may lower social welfare.

Expression of early transcription factors Oct-4, Sox-2 and Nanog by porcine umbilical cord (PUC) matrix cells

BACKGROUND: Three transcription factors that are expressed at high levels in embryonic stem cells (ESCs) are Nanog, Oct-4 and Sox-2. These transcription factors regulate the expression of other genes during development and are found at high levels in the pluripotent cells of the inner cell mass. The downregulation of these three transcription factors correlates with the loss of pluripotency and self-renewal, and the beginning of subsequent differentiation steps. The roles of Nanog, Oct-4 and Sox-2 have not been fully elucidated. They are important in embryonic development and maintenance of pluripotency in ESCs. We studied the expression of these transcription factors in porcine umbilical cord (PUC) matrix cells. METHODS: Cells were isolated from Wharton's jelly of porcine umbilical cords (PUC) and histochemically assayed for the presence of alkaline phosphatase and the presence of Nanog, Oct-4 and Sox-2 mRNA and protein. PCR amplicons were sequenced and compared with known sequences. The synthesis of Oct-4 and Nanog protein was analyzed using immunocytochemistry. FACS analysis was utilized to evaluate Hoechst 33342 dye-stained cells. RESULTS: PUC isolates were maintained in culture and formed colonies that express alkaline phosphatase. FACS analysis revealed a side population of Hoechst dye-excluding cells, the Hoechst exclusion was verapamil sensitive. Quantitative and non-quantitative RT-PCR reactions revealed expression of Nanog, Oct-4 and Sox-2 in day 15 embryonic discs, PUC cell isolates and porcine fibroblasts. Immunocytochemical analysis detected Nanog immunoreactivity in PUC cell nuclei, and faint labeling in fibroblasts. Oct-4 immunoreactivity was detected in the nuclei of some PUC cells, but not in fibroblasts. CONCLUSION: Cells isolated from PUC express three transcription factors found in pluripotent stem cell markers both at the mRNA and protein level. The presence of these transcription factors, along with the other characteristics of PUC cells such as their colony-forming ability, Hoechst dye-excluding side population and alkaline phosphatase expression, suggests that PUC cells have properties of primitive pluripotent stem cells. Furthermore, PUC cells are an easily and inexpensively obtained source of stem cells that are not hampered by the ethical or legal issues associated with ESCs. In addition, these cells can be cryogenically stored and expanded

On the Scholes Liquidation Problem

How should an investor unwind a portfolio in the face of recurring and uncertain liquidity needs? We propose a model of portfolio liquidation in two periods to investigate this question, initially posed by Myron Scholes following the fall of Long Term Capital Management. We show that when the expectation of future liquidity needs is low, the optimal solution involves selling assets that have low permanent and temporary price impacts of trading. However, when there is a high probability of a large future liquidity need, the optimal solution involves retaining assets that have a small temporary impact of trading. In the face of potential future adversity, there is a high option-value to the temporary component of liquidity. The permanent component of liquidity does not share this feature, so that investors will prefer to sell assets with a low ratio of permanent to temporary price impact in the early stages of a crisis, and to hold on to assets with a high ratio of permanent to temporary price impact to protect themselves against an aggravation of the crisis.

Early frontotemporal dementia targets neurons unique to apes and humans

Objective: Frontotemporal dementia (FTD) is a neurodegenerative disease that erodes uniquely human aspects of social behavior and emotion. The illness features a characteristic pattern of early injury to anterior cingulate and frontoinsular cortex. These regions, though often considered ancient in phylogeny, are the exclusive homes to the von Economo neuron (VEN), a large bipolar projection neuron found only in great apes and humans. Despite progress toward understanding the genetic and molecular bases of FTD, no class of selectively vulnerable neurons has been identified. Methods: Using unbiased stereology, we quantified anterior cingulate VENs and neighboring Layer 5 neurons in FTD (n = 7), Alzheimer's disease (n = 5), and age‐matched nonneurological control subjects (n = 7). Neuronal morphology and immunohistochemical staining patterns provided further information about VEN susceptibility. Results: FTD was associated with early, severe, and selective VEN losses, including a 74% reduction in VENs per section compared with control subjects. VEN dropout was not attributable to general neuronal loss and was seen across FTD pathological subtypes. Surviving VENs were often dysmorphic, with pathological tau protein accumulation in Pick's disease. In contrast, patients with Alzheimer's disease showed normal VEN counts and morphology despite extensive local neurofibrillary pathology. Interpretation: VEN loss links FTD to its signature regional pattern. The findings suggest a new framework for understanding how evolution may have rendered the human brain vulnerable to specific forms of degenerative illness

Back to Business and (Re)employing Workers? Labor Market Activity During State COVID-19 Reopenings

We study the effect of state reopening policies on a large set of labor market indicators through May 2020 to: (1) understand the recent increase in employment using longitudinal as well as cross-sectional data, (2) assess the likely trajectory of reemployment going forward, and (3) investigate the strength of job matches that were disrupted by COVID-19. Estimates from event studies and difference-in-difference regressions suggest that some of the recent increases in employment activity, as measured by cellphone data on work-related mobility, internet searches related to employment, and new and continuing unemployment insurance claims, were likely related to state reopenings, often predating actual reopening dates somewhat. We provide suggestive evidence that increases in employment stem from people returning to their prior jobs: reopenings are only weakly related to job postings, and longitudinal CPS data show that large shares of the unemployed-on-layoff and employed-but-absent in April who transitioned to employment in May remain in the same industry or occupation. Longitudinal CPS estimates further show declines in reemployment probabilities with time away from work. Taken together, these estimates suggest that employment relationships are durable in the short run, but raise concerns that employment gains requiring new employment matches may not be as rapid.Weinberg gratefully acknowledges support from UL1 TR002733 and R24 HD058484