About
I am an assistant professor in management and strategy with a joint appointment in economics at HKU Business School. I received my BA from Harvard University in 2012 and my PhD from MIT in 2022.
I am an applied microeconomist. My interest includes labor economics, organizational economics, housing, and money and barter. Here is my CV. You can reach me at mbwong@hku.hk or DM me on Twitter. I am hiring a pre-doctoral research assistant. Feel free to email me!
Working Papers
(with Duoxi Li)
Last Updated: July 2024
Abstract (click to expand): We study intermediation in frictionless matching markets for relational contracts. We show that intermediaries that aggregate demand, monitor performance, and direct allocations can efficiently emerge. Such intermediaries reduce producer idleness, separation, and incentive rents, but require an additional intermediary incentive rent. Buyers sort into bilateral and intermediated relational contracts in a unique steady-state equilibrium. Their optimal choice depends on demand volatility, gains from specialization, market tightness, the extent of the market, and reputation concerns. A decline in communication frictions may increase intermediation. Our model can be used to understand the labor boundaries of firms and the welfare consequences of intermediation.
(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.
(with Mayara Felix)
Last Updated: April 2024
Abstract (click to expand): The rise of domestic outsourcing is documented to have reduced the wages of low-wage workers, but little is known about its effects on employment and on higher-wage occupations. This paper estimates the effects of domestic outsourcing using Brazil’s 1993 court-ordered outsourcing legalization, which sharply increased outsourcing in the large and professionalized occupation of security guards. We find that legalization led to a wave of occupational layoffs that affected 7-9% of the occupation. These layoffs temporarily reduced the employment of direct-hire incumbent guards and persistently reduced their wages, due to transitions to other occupations and lower-wage firms. By contrast, on-site outsourcing, where workers flowed to contract firms, was rare. We then estimate the effect of legalization on local labor markets, using a triple-differences design that leverages North-South variation in pre-legalization court permissiveness and compares guards to less affected occupations. We find that legalization persistently increased total guard employment by 5.2% and shifted the occupation’s demographic composition towards younger workers, while having no effect on demographic-adjusted wages. Roughly half of the employment increase was driven by workers coming from outside formality. A simple framework suggests that outsourcing legalization increased efficiency in Brazil’s security service sector, with only limited effects on worker surplus.
Last Updated: June 2024
Abstract (click to expand): This paper studies the rise and fall of a redeemable digital currency using unique high-frequency data on barter and monetized transactions from a mobile app platform in Toronto. The observed effects of unexpected monetary experiments are compared with predictions from canonical models in monetary economics. I find that a large expansion of token supply persistently increased monetized transactions and reduced token velocity without generating inflation. In addition, subsequent reductions in redeemability did not meaningfully change token prices or supply, but instead significantly decreased token acceptance, transactions, and velocity. Only models that feature both search and price coordination frictions can account for this evidence.
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
Conditionally accepted, 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
Digital Money Adoption and Redemption
(with Baiyun Jing, Yang You, and Yulin Zhong)
Commodity Money: Theory and Field Evidence
(with Baiyun Jing)
Rent Regulation and Housing Affordability
(with Zhongji Wei)
Anatomy of a Housing Affordability Crisis
(with Jimmy Ho, Yulin Hong, Lichen Zhang)
Teaching
Current: Instructor for HKU’s PMGM7004 (Global Management from Economics Perspectives) and PMGM7019 (Economics of Strategy and Organization).
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
How to have productive PhD advisor meetings
Policy Writing
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
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)