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.
I study the microeconomic structure of markets and organizations. My projects examine structural shifts in labor, housing, and money markets, and their implications for inequality and institutional adaptation.
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: January 2025
Abstract (click to expand): Why and when do managers replace markets in allocating resources? We develop a general equilibrium model of an exchange economy in which centralized monitors partly supplant anonymous matching markets in coordinating assignments between buyers and producers. In our model, managers emerge as nexuses of relational contracts to mitigate a fundamental conflict between incentive provision and flexible allocations in fluctuating environments. We find that managerial coordination strengthens relational incentives and reduces misallocation, but leads to double marginalization of incentive rents. Because of this trade-off, market participants sort into decentralized market exchange and managerial coordination. Their optimal choice depends on factors such as demand volatility, specialization needs, market size, market tightness, and market-level reputation effects. Our model provides novel insights into the equilibrium structure, boundaries, and economic impacts of firm-like organizations, explaining when and why managerial hierarchies emerge from market-based mechanisms.
(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: February 2025
Abstract (click to expand): Domestic outsourcing is known to reduce worker wages, but its effect on employment security---a key dimension of job quality---has not been studied. Using Brazil's comprehensive employee-employer data, we robustly find that outsourcing reduces exit from formal employment among cleaners and security guards during their first few years of tenure. The observed reduction in employment hazard is larger in cities with greater volatility in labor demand. Our findings are not attributable to differences in worker characteristics or changes in local market conditions. To explain the findings, we develop a search-theoretic model in which outsourcing both alters wage setting and eases reassignment across firms. The estimated model suggest that outsourcing had more positive welfare effects on workers upon job entry than implied by wage differentials alone.
Last Updated: January 2025
Abstract (click to expand): This paper presents real-world evidence for theories of money as a medium of exchange. I leverage unique transaction-level data from a Toronto-based barter community that introduced a redeemable digital currency. I use interrupted time-series designs to measure the impacts of three unexpected monetary events---a large increase in the level of token supply and subsequent partial and complete halts in redemption---on token acceptance, token velocity, and the number of barter and token-mediated transactions. My findings are best explained by a search-theoretic model in which money is essential, prices are persistently rigid, and redeemability is necessary for money circulation.
Slides
(with Baiyun Jing, Yang You, and Yulin Zhong)
Last Updated: March 2025
Abstract (click to expand): Many currencies are backed by promises of redemption---including stablecoins, pegged currencies, bank deposits, and asset-backed securities---but it is unclear why redemption is important when redemption volumes are often low. We show in a search-theoretic model of money that redeemability can coordinate agents on a monetary equilibrium despite zero steady-state redemption volume. However, either mispricing of the redemption good or a lack of confidence can trigger a run. Moreover, with heterogeneity in agent preferences, redeemability may become both costly and necessary for money circulation. We test the predictions of our model using unique transaction-level data from a real-world used-goods trading platform, as well as novel cross-sectional and time-series variation in redeemability. The evidence leads to new insights regarding the benefits, costs, risks, and optimal design of currency redemption.
Last Updated: March 2025
Abstract (click to expand): This paper compares the targeting efficiency of subsidized ownership and rental housing programs. I leverage the staggered roll-out of Hong Kong's Tenants Purchase Scheme, which allowed 183,700 regularly means-tested public housing tenants to buy permanent occupancy rights between 1998 and 2006. Using a difference-in-difference design, I find that the switch to subsidized ownership caused average household sizes to decrease by 5 percent and average incomes to increase by 23 percent in treated estates. Average schooling of younger adult residents rose by a year, while the share of households residing with extended family and the share of married persons sharply fell. These effects are attributable to the removal of regular income tests, which altered household formation and thereby worsened the targeting of needy populations.
(with Jimmy Ho, Yulin Hong, and Zhongji Wei)
Last Updated: March 2025
Abstract (click to expand): We present new theory and evidence on the equilibrium effects of rent regulation. Departing from existing models, we develop a framework showing that rent regulation may generate divergent price effects on high- and low-quality unregulated units, as housing becomes misallocated across income groups. The model helps explain the recent evolution of the housing market in Hong Kong—--a global metropolis where nearly one-third of residents occupy rent-regulated public housing. Leveraging detailed population census data from 2006 to 2016, we document increasing misallocation of public housing to higher-income tenants over time. Concurrently, rent growth in lower-quality private-sector units significantly outpaced rent growth in higher-quality segments. Our analysis suggests that although rent regulation shielded incumbent public tenants from market pressures, it exacerbated affordability challenges for younger generations and migrants.
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 Welfare Effect(s) of Rent Regulation
(with Zhongji Wei)
Policy Writing
Anatomy of a Housing Affordability Crisis: Hong Kong, 2001-2021
(Hong Kong Economic Policy Green Paper, 2025-1-9, with Jimmy Ho and Yulin Hong)
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
公屋富戶政策改革 是改善民生一大步 (明報, 2025-3-28, 與牛致行和宋恩榮)
香港經濟面臨長期衰退 房策須全面改革（下） (明報, 2025-3-21, 與牛致行和宋恩榮)
香港經濟面臨長期衰退 房策須全面改革（上） (明報, 2025-2-20, 與牛致行和宋恩榮)
剖析香港住房危機：演變與對策 (香港經濟政策綠皮書, 2025-1-9, 與何漢樑和洪雨林)
富戶租金嚴重過低 必須調整 (明報, 2024-12-6, 與何漢樑和牛致行)
要告別劏房 絕不能規管起始租金 (明報, 2024-11-7, 與宋恩榮)
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)
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
Lab
I’m hiring a research associate for JC PROJECT LIFT. Please apply!
I’m also recruiting graduate students at HKU. My current projects are to:
- Develop models of relational contracting networks, markets, and hierarchies;
- Measure the impact of housing policy on inequality and welfare;
- Study money and barter in the field.
Email me if you are interested. Please include a CV and a concise description of your relevant experience and interests.
