About me
My name is Ertunc Aydogdu, and I am a Ph.D. candidate in Finance at Tilburg University. My research spans across empirical industrial organization, household finance, financial technologies, and the realms of financial intermediation and regulation.
I will be on the academic job market in the 2024-25 academic year.
Interests
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Empirical industrial organization
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Financial intermediation
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Financial regulation
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Household finance
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Financial technologies
Education
Ph.D. in Finance, 2025
Tilburg University
M.Phil. in Finance, 2019
Tilburg University
M.A. in Economics, 2017
Bogazici University
B.A. in Economics, 2015
Bogazici University
Working Papers
Financial Intermediation and Regulation
"Prudential Regulation for Financial Stability in Economies with Financial Dollarization" (Job Market Paper)
This paper constructs a structural empirical model of imperfect competition in the dual currency banking system of a small open economy. It features banks that extend loans in both local and foreign currencies, invest in government bonds denominated in the local currency, and finance their operations through deposits in both currencies. Furthermore, the model allows for banks to obtain funding from both the domestic interbank market in local currency and from run-prone non-resident banks in foreign currency. A key feature of the model is its incorporation of endogenous bank default, allowing for multiple equilibria with self-fulfilling solvency bank runs driven by the feedback between banks' financial distress and pricing decisions of run-prone non-resident banks. The model is estimated using detailed micro-level data from the Central Bank of the Republic of Türkiye for the period 2009-2017. The findings confirm the Turkish banking sector's inherent vulnerabilities during the study period, showing an average increase in banking sector fragility of 13.24 percentage points in alternate equilibria compared to those observed under the actual policy. Counterfactual analyses demonstrate that implementing a 5 percent tax on banks' dollar borrowing from non-resident banks, on average, results in a 10 percent reduction in banks' probability of default, without incurring notable welfare losses. Additionally, the findings suggest that this regulatory measure can effectively serve as a complement to monetary policy, reinforcing tightening measures and facilitating the transmission of local monetary policy to both loan and deposit markets.
Presentations: IMF (DC, scheduled) • EARIE 2024 (Amsterdam) • Tri-City Day-Ahead Workshop on the Future of Financial Intermediation (Frankfurt) • Bank of England (London) • 2024 FMA European Conference (Turin) • Stevens School of Business (Finance, scheduled) • Columbia Business School (Economics, scheduled) • Columbia Business School (Finance) • Tilburg University (Finance) • Tilburg University (Econometrics)
Work in Progress
Household Finance
"Regulating the Sharing Economy: The Welfare Effects of Airbnb on Housing and Mortgage Markets" with Fabio Braggion, Mauro Mastrogiacomo, Nicola Pavanini, and Yushi Peng.
We examine the welfare effects of Airbnb on housing and mortgage markets in the Netherlands. Exploiting the strict rules imposed on Airbnb rentals in Amsterdam, we first document that these rules have sizable effects on several Airbnb, mortgage and housing market outcomes. Motivated by these empirical findings, we develop a structural model to quantify the welfare effects of Airbnb to inform policymakers about the optimal regulation design in this market. We estimate this model relying on the proprietary data sets from the Dutch Central Bank (DNB), the Central Bureau for Statistics (CBS), and the Dutch Association of Real Estate Agents (NVM).
Presentations: De Nederlandsche Bank (Amsterdam) • Tilburg University (Finance) • Tilburg University (Econometrics)
"The Welfare Effects of Price Ceilings: Evidence from the Auto Insurance Market"
Financial Intermediation and Regulation
"Dealer Intermediation and Pricing in the Sterling Repo Market" with Quynh- Anh Vo
Presentations: Bank of England (London)
Financial Technologies
"The Good, the Bad, and the Ugly Sides of a Cashless Society" with Vedat Akgiray and Emir Sener (conditionally accepted, the Annual Review of Fintech)
The shift towards a cashless society is strongly endorsed by governments and businesses due to its potential to reduce cash handling costs, enhance transaction transparency, and improve operational efficiency. This transition is facilitated by various digital payment methods, including credit and debit cards, e-wallets, and mobile payment platforms. However, this shift also imposes significant financial burdens, with payment fees estimated at around $2 trillion annually. We investigate the origins of these steep fees as society moves away from cash transactions. We further explore the consequences of the lack of a public payment infrastructure, which has enabled profit-driven initiatives to develop proprietary systems and set up walled gardens within the payments industry. We then analyze the prospective transformative role of Central Bank Digital Currencies (CBDCs) – a public infrastructure – in establishing a more affordable and equitable payment system. Through the analysis of global CBDC trials, we outline six key parameters necessary for their successful deployment: scalable infrastructure, privacy protection, capability for offline transactions, digital identity verification, integration with smart contracts, and support for cross-border transactions.
"Regulating Two-sided Markets: The Case of Payment Card Industry"
Publications
Household Finance
In this paper, we study high-stakes risky choices of contestants in the Turkish edition of the popular TV game show Deal or No Deal. We conduct a large-scale replication of Post, Van den Assem, Baltussen, and Thaler (2008), and we investigate contestant behavior in Turkey in detail via the expected utility and cumulative prospect theory. We find strong empirical support on the role of path dependence in shaping risk attitudes: Turkish contestants who enjoy early gains or suffer early losses in the initial rounds of the game are more risk-lover than other contestants, which aligns well with the break-even and house-money effects à la Thaler and Johnson (1990). We also document that the cumulative prospect theory predicts contestant behavior better than the expected utility theory empirically. Finally, we demonstrate that risk aversion exhibits sizable heterogeneity over demographics, and female and university-graduate contestants are more risk-averse than their male and less-educated counterparts.