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. I study labor, organizational, monetary, and housing economics. My research aims to understand the microstructure of marketplaces and organizations using transparent data analysis, simple models, and attention to institutional detail.
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 for 2024-2025 or 2025-2026. Feel free to email me!
Working Papers
(with Duoxi Li)
Last Updated: March 2024
Abstract (click to expand): We develop a repeated-game model of an economy in which buyers may frictionlessly enter relational contracts with either producers or intermediaries. We show that centralized intermediaries that allocate and monitor producers may endogenously emerge to help matched producers avoid separation or idleness as demand fluctuates. This result suggests that firm-like organizations can exist in the absence of many forces previously deemed important in the theory of the firm, including asset specificity, bounded rationality, hold-up, as well as bargaining, search, adaptation, and contract-writing costs. In our model, buyer’s optimal choice between intermediation and bilateral contracting depends on demand volatility, gains from specialization, market tightness, and reputation effects. The model sheds new light on many real-world applications, including professional service firms, supply chains, franchises, online platforms, schools, hospitals, managers, and governments.
(with Mayara Felix)
Last Updated: June 2023
Abstract (click to expand): We estimate the effect of domestic outsourcing on labor markets using Brazil's 1993 legalization, which sharply increased the outsourcing of security guards. We use a triple-differences design that leverages North-South variation in pre-legalization court permissiveness and compares guards to less affected occupations. We find that outsourcing legalization persistently increased total employment of security guards in more restrictive regions by 8% and reduced their average age by two years. The average wage of security guards did not fall in more restrictive regions, with some specifications showing a small positive effect. However, there was a wave of layoffs that reallocated incumbent security guards to other occupations and lower-wage firms. A simple model implies that the market-level efficiency gains from outsourcing legalization more than offset the earnings losses of incumbent workers.
Twitter thread
(with Duoxi Li)
Last Updated: November 2022
Abstract (click to expand): We develop and test a model of labor market dynamics with domestic outsourcing, productivity shocks, and endogenous separations. In the model, outsourcing may reduce worker rents, smooth labor demand, or both. Depending on the relative strengths of these two effects, outsourcing has different effects on worker hazard into non-employment. We use comprehensive administrative data on security guards and cleaners from Brazil to quantify the two effects. The estimates suggest that outsourcing significantly smoothed labor demand among security guards but did not significantly reduce their rents. By contrast, outsourcing had both demand-smoothing and large rent-stripping effects on the lower-wage occupation of cleaners.
Last Updated: February 2022
Abstract (click to expand): I analyze how digital currency issuance by a private online platform affected the volume of trade in a large barter community in Toronto. The community initially banned cash, but subsequently introduced a digital token that could be transferred among users and redeemed at designated local stores for retail goods. Using comprehensive transactions data, I show that a large monetary expansion persistently increased transaction volume by 70% by enabling monetized trade. However, when token redemption was suddenly halted at a subset of stores, a run on the token ensued and transaction volume fell. The findings are consistent with a search-theoretic model wherein money functions as a medium of exchange.
Twitter thread
Presentation Video (September 2022)
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.
(with Matthew Gentzkow and Allen T. Zhang)
Last Updated: March 2024
Revise and resubmit, AEJ: Micro
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.
Publications
Work in Progress
Commodity Money: Theory and Field Evidence
(with Baiyun Jing)
Digital Money Adoption and Redemption
(with Baiyun Jing, Yang You, and Yulin Zhong)
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)
Policy Writing
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)
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)