We develop a Diamond-Dybvig-style model in which a non-bank firm issues tokens backed by its future services. Consumers face uncertain liquidity demand and costly ex-post borrowing. Tokens are partially liquid–they provide liquidity for the firm’s service but not other consumption
goods,...

Banks face a dual mandate of raising cheap deposits while avoiding liquidity risk. We propose a novel mechanism whereby banks use portfolio opacity to meet this objective. Specifically, banks choose opaque portfolios to secure cheap long-term funding while trading off...

While large language models (LLMs) perform well on well-defined tasks, effective
prompts are challenging when tasks depend on users’ soft traits and latent prefer-
ences. We formalize this friction by introducing preference uncertainty—capturing
soft information—into a cheap talk framework (Crawford and Sobel, 1982)...

Firms are increasingly adopting predictive artificial intelligence (AI) to improve decision-making by combining advanced data analysis with managerial judgment. While AI provides more precise information to support managerial decision-making, its adoption can nevertheless reduce shareholder profits and the aggregate welfare,...

We examine how a lender of last resort (LLR) and liquidity regulation jointly shape bank fragility when both liquidity and debt pricing are endogenous. In a global-games model of rollover risk, a bank's ex-ante fragility-the probability of a run-depends on...

Venture capital financing typically features complex securities and staging. We develop a dynamic contracting model where an entrepreneur seeks financing from active investors (who provide costly monitoring and screening) and passive investors (who offer cheaper capital). Under multilateral moral hazard,...