Papers
Uploaded: Jan 14, 2018
Optimal Short-Termism
This paper studies incentives in a dynamic contracting framework of a levered firm. In particular, the manager selects long-term and short-term efforts, while shareholders choose initially optimal leverage and ex-post optimal default policies. There are three results. First, shareholders trade...
Uploaded: Dec 28, 2017
An Equilibrium Model of Housing and Mortgage Markets with State-Contingent Lending Contracts
We develop a tractable general equilibrium framework of housing and mortgage markets with aggregate and idiosyncratic risks, costly liquidity and strategic defaults, empirically relevant informational asymmetries, and endogenous mortgage design. We show that adverse selection plays an important role in...
Published: Journal of Finance, 2020
Securitization, Ratings, and Credit Supply
We show that the availability of credit ratings (or other public information) increases the allocative efficiency of cash flows by reducing costly retention, but reduces lending standards and can lead to an oversupply of credit. These findings are in contrast...
Uploaded: Nov 21, 2017
Disclosure, Competition, and Learning from Asset Prices
This paper studies the classic information-sharing problem in a duopoly setting in which firms learn information from a financial market. By disclosing information, a firm incurs a proprietary cost of losing competitive advantage to its rival firm but benefits from...
Uploaded: Nov 21, 2017
Regulating a model (JFE, forthcoming)
We study a situation in which a regulator relies on risk models that banks produce in order to regulate them. A bank can generate more than one model and choose which models to reveal to the regulator. The regulator can...
Uploaded: Oct 8, 2017
Only time will tell: A Theory of Deferred Compensation
We characterize optimal contracts in settings where the principal observes informative signals over time about the agent's one-time action. If both are risk-neutral contract relevant features of any signal process can be represented by a deterministic informativeness process that is...
