Michael B. Wong

About

I am an applied economist and an assistant professor in management and strategy at HKU Business School, with a joint appointment in economics, and a courtesy appointment at HKU School of Governance and Policy.

My research combines search, assignment, and relational contracting theory with evidence to make sense of real-world markets and organizations. My work spans contexts: firm organization in Brazil, the economics of artificial intelligence, housing policy in Hong Kong, and platform currency design in Toronto.

I am the founding director of Hong Kong Future Economy Institute (HKFEI), an independent public-policy think tank dedicated to evidence-based policy innovation in Hong Kong.

I am affiliated with IZA, Rockwool Foundation, HKU Org Econ, HKU CCCW, HKU CAMO, HKU Stone Centre, HKU Jockey Club ESG Research Institute, and HKU Real Estate Lab. I serve on the Housing Authority Subsidised Housing Committee.

Here is my CV, bio, and disclosure statement. You can reach me at mbwong@hku.hk.

Working Papers

Outsourcing, Labor Market Frictions, and Employment

(with Mayara Felix)

Last Updated: August 2025

Abstract (click to expand): We estimate the labor market impacts of Brazil’s 1993 outsourcing legalization using North-South variation in pre-legalization court permissiveness, and comparing security guards to less-affected occupations. We find that outsourcing legalization persistently reallocated jobs from older incumbent guards to younger entrants. Total employment of guards and their entry from informality persistently increased, while average demographic-adjusted wages remained constant. Meanwhile, a wave of occupational layoffs displaced some incumbent guards from high-wage firms. The evidence suggests that the rise of non-core activity outsourcing reduced labor market frictions, facilitated by firm-level economies of scale in human resources and spillovers to non-adopting firms.

Managerial Coordination in Decentralized Markets

(with Duoxi Li)

Last Updated: March 2026

Revise and resubmit, Economic Journal

Abstract (click to expand): This paper develops a model of managerial coordination in decentralized relational contracting markets. Managers aggregate fluctuating buyer demand and coordinate the assignment of producers, lengthening productive relationships and relaxing dynamic enforcement constraints. This demand-smoothing benefit must be weighed against double marginalization: managers themselves require incentive rents. The trade-off endogenously sorts buyers into managerial coordination or decentralized exchange. In equilibrium, managed producers earn lower, more compressed pay with lower separation rates. The introduction of managers increases trade but redistributes surplus from producers to buyers. We extend the model to show that managerial coordination promotes specialization. The framework applies to professional service firms, global sourcing intermediaries, and digital matching platforms.

Promise and Perils of Platform Money: Evidence from a Barter Community

Last Updated: January 2026

Revise and resubmit, Economic Journal

Abstract (click to expand): This paper analyzes the effects of platform money issuance on user trade activity using microdata from a Toronto-based barter community that introduced a redeemable platform currency and later experienced a crisis. Three unanticipated events provide exogenous variation: a five‑fold increase in token supply, a sharp restriction of redemption opportunities, and a complete halt of redemption. Using event study designs, I show that monetary expansion raised total trades by around 57 percent, entirely via token‑mediated trades, with barter unchanged. Restricting and then halting redemption reduced token acceptance and token‑mediated trade, with the initial restriction also lowering barter, via reductions in platform use and new user entry. The findings highlight how platform money may increase trade, but caution that reputational enforcement may amplify the costs of a redemption crisis.

Teaching case

Redemption Design and Digital Currency Adoption

(with Baiyun Jing, Yang You, and Yulin Zhong)

Last Updated: January 2026

Abstract (click to expand): Many digital currencies are backed by redemption promises, but little evidence or theory informs currency redemption policy. We study the impact of redemption policy on digital currency adoption and flows, leveraging novel geographical variation in redemption convenience and transaction data from a peer-to-peer used goods trading platform. We show in a search-theoretic framework that redeemability may induce digital currency adoption at zero steady-state cost. However, the evidence is more consistent with a heterogeneous-agent model, in which tokens flowed on average towards users who were closer to redemption opportunities and redeemability is both costly and necessary for digital money circulation. A key implication is that optimal policy may impose some degree of redemption friction.

Publications

Ideological Bias and Trust in Information Sources

(with Matthew Gentzkow and Allen T. Zhang)

American Economic Journal: Microeconomics, 2025

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.

Domestic Outsourcing and Employment Security

(with Naijia Guo and Duoxi Li)

Last Updated: May 2026

Accepted, Journal of Development Economics

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 linked data, we 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. The reduction is not attributable to differences in worker characteristics or differential exposure to local labor market shocks. The estimates suggest that outsourcing had larger positive effects on the net present value of worker earnings than implied by wage differentials alone. The patterns are consistent with a search-theoretic model in which outsourcing eases reassignment across firms.

Subsidize Rent or Subsidize Homeownership? Evidence from a Hong Kong Experiment

Last Updated: January 2026

Conditionally Accepted, Regional Science and Urban Economics

Abstract (click to expand): Governments often provide homeownership subsidies, but their effects may depend critically on institutional context. This paper estimates the impacts of Hong Kong’s Tenants Purchase Scheme, an unusual program that allowed 183,700 regularly income-tested public housing tenants to buy restricted ownership rights. Leveraging its incomplete roll-out between 1998 and 2006, I find that the program increased the share of "well-off" households in treated housing estates by 44 percent from 11 p.p. Further evidence suggests that incumbent households purchased units to avoid regular income tests and reconfigured co-residence among family members to obtain additional public housing units. The unintended consequence was to exacerbate hardship for excluded low-income populations.

Work in Progress

Housing Market Responses to Non-market Allocation: An Assignment Approach

(with Jimmy Ho, Yulin Hong, and Zhongji Wei)

The Welfare Effects of Non-market Housing Allocation

(with Zhongji Wei)

Moral Hazard and the Cost of In-kind Transfers: Evidence from Public Housing

(with Russell Tsz-Nga Wong)

Managerial Scope and Span in a Relational Economy

Relational Hierarchies

Relational Investment

The Skill Content of AI: First-personal Experience and Returns to Human Capital

Policy Writing

Housing Affordability and Homeownership in Hong Kong, 1985-2023 (Hong Kong Economic Policy Green Paper, 2026-1-14, with Allen W. Huang and Alex Ngau)

Hong Kong’s Labor Force Participation Rate is Rapidly Declining Due to Population Aging (Technical note, 2025-10-29, with Yiran He)

How Hong Kong can reimagine its greatest asset: people’s homes (South China Morning Post, 2025-4-5, with Alex Ngau)

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

從上流階梯到階梯斷層——香港公營房屋福利的世代差距 (明報, 2026-1-29, 與牛致行和宋恩榮)

闡釋1985-2023年間香港房屋負擔能力與置業動向 (香港經濟政策綠皮書, 2026-1-14, 與黃唯一和牛致行)

施政報告扶助置業方向正確 惜力度不足 (明報, 2025-10-2, 與牛致行和宋恩榮)

租置杳然未破局 夾心階層上流難 (信報, 2025-9-18, 與牛致行和宋恩榮)

房策全面改革——促進置業、重建房屋階梯、鼓勵青年上流 (明報, 2025-9-11, 與牛致行和宋恩榮)

公營房屋改革 會否冲跨私樓市場 (明報, 2025-8-21, 與牛致行和宋恩榮)

租置計劃：從失敗教訓到全民共享 (明報, 2025-7-31, 與牛致行和宋恩榮)

居屋二手市場流通窒息 買賣限制須大幅放寬 (明報, 2025-7-3, 與牛致行和宋恩榮)

居屋嚴重短缺扭曲社會發展 需大幅擴建 (明報, 2025-6-27, 與牛致行和宋恩榮)

現金津貼試行計劃退場 是明智決定——從經濟學理論看補貼轉型的必要性 (明報, 2025-6-5, 與牛致行和宋恩榮)

財赤之出路：賣公屋 救香港！ (明報, 2025-4-24, 與牛致行和宋恩榮)

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-), PMGM7019/ECON6006 (Economics of Strategy and Organization, 2022-), and ECON4200 (Senior Seminar in Economics and Finance, 2026-).

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