Working Papers
"Non-Profits, Competition, and Risk Segmentation in Consumer Lending Markets" (with Andres Shahidinejad and Jordan van Rijn)
Last Updated: August 2025
We study how competition between non- and for-profit lenders shapes the equilibrium distribution of credit risk across lending institutions. Using auto loan data, we document direct competition between credit unions and banks for a significant fraction of the market. However, a degree of market segmentation by borrower risk still exists: credit unions serve observably and unobservably lower-risk borrowers. Using exposure to bank mergers as quasi-exogenous variation in market structure, we provide evidence that price differences between credit unions and banks contribute to this segmentation, consistent with adverse selection on borrower risk. These results highlight potential unintended consequences of bank consolidation.
"Merger Effects and Antitrust Enforcement: Evidence from US Consumer Packaged Goods" (with Vivek Bhattacharya and Gaston Illanes)
Last Updated: July 2025
(Conditionally Accepted at the American Economic Review)
We document the effects of a comprehensive set of mergers of US consumer packaged goods manufacturers on prices, quantities, and product assortment. Across specifications, we find a small average price effect of mergers (-0.6% to 1.0%) but substantial heterogeneity in effects, with a standard deviation between 4.0–7.5 pp. Through a model of enforcement, we find that agencies act as if they challenge mergers they expect would increase prices more than 4.8–6.3%. Increases in stringency would reduce prices and the prevalence of completed price-increasing mergers, with minimal impacts on blocked price-decreasing mergers, at a significantly greater agency burden.
"Loan Guarantees and Incentives for Information Acquisition"
Last Updated: January 2024
To address credit constraints in small-business lending markets, policymakers frequently use loan guarantees, which insure lenders against default. Guarantees affect loan prices by altering the effective marginal cost of lending but may create a moral hazard problem, weakening lenders’ information-acquisition incentives. I quantify these channels using data from the SBA 7(a) Loan Program. Guarantees benefit borrowers, on average, but redistribute surplus from low- to high-risk borrowers. Fixing government spending, an alternative policy with a 50% guarantee and a subsidy leads to an increase in borrower surplus and 0.1 percentage point (1.1%) decline in the program’s default rate.
"Incentive Structures and Borrower Composition in the Paycheck Protection Program" (with Paul Kim)
Last Updated: November 2021
We study the design of the Paycheck Protection Program (PPP), a loan-forgiveness scheme that is implemented through private lenders and assists small businesses in keeping their employees on payroll during the COVID-19 pandemic. We develop a model of PPP lending to capture the government’s tradeoff between inducing bank participation and targeting funds for use on payroll. Using the model, we establish that both increasing subsidies and relaxing forgiveness standards are effective in expanding credit access to borrowers seeking smaller loans. However, their efficacy in targeting (i.e., providing funds to businesses who will use them on payroll) depends on the correlation between loan amounts and borrowers’ return to payroll. We test the implications of the model using policy variation from the PPP Flexibility Act, legislation that relaxed forgiveness standards. Consistent with the predictions of the model, the average loan amount falls by between 6 and 7% in the period following the policy change. Furthermore, marginal borrowers are more likely than inframarginal borrowers to use funds for payroll, so making forgiveness more accessible increases the average share of funds used for those purposes.
Work in Progress
"A Large-Scale Evaluation of Merger Simulations" (with Vivek Bhattacharya, Gaston Illanes, Avner Kreps, and Jose D. Salas)
"How Do Firms Respond to Changes in Investor Demand? The Role of Financial Market Power in Corporate Policy" (with Ali Sanati)