About
I am an assistant professor in management and strategy with a joint appointment in economics at HKU Business School. I received my PhD from MIT in 2022 and my BA from Harvard University in 2012.
My research combines theory and evidence to study (1) the role of intermediaries in labor markets, (2) the role of monetary institutions in exchange, and (3) the role of housing in urban inequality.
I am a Fellow of the HKU CCCW, an affiliate researcher of the HKU Jockey Club ESG Research Institute, a member of the HKU Real Estate Lab, and a board member of local policy research think tank Citizen Action Design. My writings have been featured in publications such as SCMP, Ming Pao, HKEJ, and HKET.
Here is my CV and disclosure statement. You can reach me at mbwong@hku.hk or DM me on Twitter.
Working Papers
(with Duoxi Li)
Last Updated: October 2024
Abstract (click to expand): The visible hand of intermediaries often replaces the invisible hand of markets in determining allocations. We develop repeated-game models showing when and why intermediaries enter relational contracts on both sides of a competitive market to coordinate assignments. We show that monitoring intermediaries can redress market misallocation when trust is lacking. However, they require an incentive rent, so in equilibrium buyers sort into decentralized bilateral exchange and centralized coordination. Their optimal choice depends on their demand volatility, need for specialized services, market tightness, market size, and reputation effects. Our theory explains the observed determinants and effects of professional service outsourcing.
Last Updated: October 2024
Abstract (click to expand): Theories of money as a medium of exchange predict that money overcomes the inefficiencies of barter. This paper provides real-world evidence using three unexpected monetary events and unique transaction-level data from a large Toronto-based barter community that introduced a redeemable digital currency. I find that monetary expansion did not alter prices and persistently increased monetized transactions. Partial and complete halts in redemption also did not alter prices and persistently reduced token acceptance and transactions. These findings confirm the essentiality of money, but reject a large class of models that feature universal acceptance of non-redeemable fiat money and efficient long-run prices.
Slides
(with Mayara Felix)
Last Updated: August 2024
Abstract (click to expand): This paper estimates the wage, employment, and reallocation effects of non-core activity outsourcing using Brazil’s unexpected 1993 court-ordered outsourcing legalization. We leverage North-South variation in pre-legalization court permissiveness and compare security guards to less affected occupations. We find that older incumbent security guards were adversely impacted through occupational layoffs, loss of firm-level wage premia, and exit from the occupation. At the same time, increased numbers of younger workers entered the formal sector and became employed at contract firms. On net, legalization increased guard employment by 5%, led by a 50% increase in employment for guards aged 18-24, and had no effect on demographically-adjusted guard wages. The observed labor reallocation effects are explained by the fact that contract firms persistently employ demographically different workers than direct employers.
(with Naijia Guo and Duoxi Li)
Last Updated: July 2024
Abstract (click to expand): Domestic outsourcing is robustly associated with reduced exit from formal employment among cleaners and security guards in Brazil during their first few years of tenure. This difference is not explained by worker characteristics or differential exposure to labor market conditions. We explain this novel fact by developing a search-theoretic model wherein intermediary firms can reassign outsourced workers across client firms when negative productivity shocks hit. The estimated model fits observed wage differentials and hazard profiles tightly. By easing reassignment across firms, domestic outsourcing had more positive welfare effects on workers upon job entry than implied by wage differentials alone.
Last Updated: March 2024
Abstract (click to expand): This paper studies the effects of rent notches on the household composition and average incomes of Hong Kong's public housing residents. I leverage the staggered roll-out of the Tenants Purchase Scheme between 1998 and 2006, which allowed 183,700 tenants to buy permanent occupancy rights at discounted prices and thereby removed rent notches. Difference-in-difference estimates reveal that household sizes declined by 4-5 percent in the treated estates, while average households income rose by 23 percent. The average schooling of younger adults increased by one year. These results suggest that the removal of rent notches worsened the targeting of housing assistance towards low-income populations, partly due to endogenous changes in household formation.
Publications
(with Matthew Gentzkow and Allen T. Zhang)
Last Updated: March 2024
Forthcoming, American Economic Journal: Microeconomics
Abstract (click to expand): We study the role of endogenous trust in amplifying ideological bias. Agents in our model learn a sequence of states from sources whose accuracy is ex ante uncertain. Agents learn these accuracies by comparing their own reasoning about the states based on introspection or direct experience to the sources' reports. Small biases in this reasoning can cause large ideological differences in the agents' trust in information sources and their beliefs about the states, and may lead agents to become overconfident in their own reasoning. Disagreements can be similar in magnitude whether agents see only ideologically aligned sources or diverse sources.
Work in Progress
The Role of Redemption in Currency Circulation: Theory and Transaction-level Evidence
(with Baiyun Jing, Yang You, and Yulin Zhong)
Commodity Money: Theory and Field Evidence
(with Baiyun Jing)
The Effect(s) of Public Housing Rent Regulation on Private-sector Rents in Hong Kong
(with Zhongji Wei)
Anatomy of a Housing Affordability Crisis: Hong Kong, 2006-2016
(with Jimmy Ho, Yulin Hong, Lichen Zhang)
Teaching
Current: Instructor for HKU’s PMGM7004 (Global Management from Economics Perspectives, 2022-) and PMGM7019 (Economics of Strategy and Organization, 2022-).
Previous: TA for MIT’s Intro Micro (undergrad, 2022), Intermediate Micro (undergrad, 2018-20), Applied Econ for Managers (EMBA, 2019), Org Econ (PhD, 2018), and Industrial Organization II (PhD, 2022).
Notes
Things I learned in Grad School (the Hard Way)
Tips for excelling as a PhD student
Policy Writing
Hong Kong’s economic recovery hinges on having enough adequate housing (South China Morning Post, 2024-8-9)
Hong Kong must stop letting the well-off hog public rental housing (South China Morning Post, 2024-5-4, with Jimmy Ho)
Why is Hong Kong Housing So Expensive? (HKU FOSS presentation, 2024-3-6)
The Solution to Hong Kong’s Subdivided Housing Crisis
(Translated from Hong Kong Economic Journal, 2024-2-14)
Brain Drain, Brain Gain, and The Future of Hong Kong: Evidence from LinkedIn Profiles
(Hong Kong Economic Policy Green Paper, 2024-1-10, with Alan P. Kwan and Heiwai Tang)
Using Data and Algorithms to Reduce Public Housing Wait Times
(Hong Kong Economic Policy Green Paper, 2024-1-10, with Shing-Yi Wang and Maisy Wong)
What Caused Hong Kong’s Housing Crisis?
(Hong Kong Economic Policy Green Paper, 2022-9-23, Twitter thread)
In Hong Kong’s Olympic glory, a glimpse of a hopeful new future (South China Morning Post, 2021-8-4)
Liberal or conservative, Hongkongers must learn to listen to those they disagree with (South China Morning Post, 2019-9-7, with Spike Lee and Josephine Au)
中文文章
住房短缺礙引才 政府應續增建屋 (明報, 2024-8-14)
加強富戶審查 劏房戶免受苦？ (明報, 2024-5-16, 與何漢樑)
香港劏房問題之出路 (香港信報, 2024-2-14)
人才得失與香港前景：領英社交資料佐證 (香港經濟政策綠皮書, 2024-1-10, 與關穎倫和鄧希煒)
利用數據和算法減低公屋輪候時間 (香港經濟政策綠皮書, 2024-1-10, 與王欣儀和黃美施)
香港房屋危機之謎 (香港經濟政策綠皮書, 2022-9-23)
預算案500億推創科 怎用得其所 (香港經濟日報, 2018-3-18)
社會面對新挑戰 須3方面調整 (香港經濟日報, 2017-9-13)
