Papers
Uploaded: Mar 27, 2019
Pricing and Liquidity in Decentralized Asset Markets
I develop a search-and-bargaining model of endogenous intermediation in over-the-counter markets. Unlike the existing work, my model allows for rich investor heterogeneity in three simultaneous dimensions: preferences, inventories, and meeting rates. By comparing trading-volume patterns that arise in my model...
Uploaded: Mar 16, 2019
Corporate Liquidity Management under Moral Hazard
We present a model of liquidity management and financing decisions under moral hazard in which a firm accumulates cash to forestall liquidity default. When the cash balance is high, a tension arises between accumulating more cash to reduce the probability...
Uploaded: Mar 15, 2019
The Good, the Bad and the Complex: Product Design with Imperfect Information
This paper explores the incentives of product designers to complexify products, and the resulting implications for overall product quality. In our model, a consumer can accept or reject a product proposed by a designer, who can affect the quality and...
Uploaded: Mar 15, 2019
Dynamic Coordination with Flexible Security Design
Entrepreneurs obtain funding liquidity by issuing securities backed by the current period dividend and resale price of a long-lived collateral asset. They are privately informed about the collateral quality. Higher (lower) resale price lowers (increases) adverse selection and makes the...
Uploaded: Mar 14, 2019
Choosing to disagree in financial markets
The rational expectations paradigm restricts the subjective beliefs of investors to align with the objective distribution. We relax this constraint and analyze how investors optimally choose their subjective beliefs about the information contained in their private signals and in prices....
Uploaded: Mar 14, 2019
The Tragedy of Complexity
This paper presents an equilibrium theory of product complexity. Complex products generate higher potential value, but require more attention from the consumer. Because consumer attention is a limited common resource, an attention externality arises: Sellers distort the complexity of their...
